The Executive Order envisions a regulatory framework that promotes responsible innovation while protecting consumer privacy, data, and assets, providing adequate disclosures to investors, and supporting equitable economic growth. In particular, the Executive Order shows concern for the risks digital assets pose to less informed market participants and the potential for these risks to exacerbate social inequities. The Executive Order also aims to protect US consumers, investors, and businesses from the financial risks posed by a digital asset ecosystem lacking appropriate oversight. In response to these issues, the Executive Order calls on several US federal agencies to provide strategic advice on how to effectively mitigate these risks, which have taken on greater import given the conflict in Ukraine. Notably, the Executive Order comes just days after the Treasury Department issued its 2022 National Risk Assessment specifically addressing the exploitation of the digital economy by criminals, foreign terrorist groups, and rival nations. The Executive Order details the illicit uses of digital assets and decentralized finance: the facilitation of money laundering, terrorism financing, ransomware, and sophisticated cybercrime. National security and illicit finance risk The Executive Order also mandates that the report include research on potential uses of blockchain technology to mitigate climate impacts, such as liability exchanges for greenhouse gas emissions, water, and other natural or environmental assets. In this light, the Executive Order requests a report from various US federal agencies exploring the short, medium, and long-term effects of new digital asset technologies, such as proof-of-stake cryptocurrency mining, on climate change and the energy sector. The high-energy consumption required for digital asset financial structures is a growing concern among environmentalists. This framework will expand existing CBDC-related international cooperation, such as the G7 Digital Payments Experts Group.Īddressing digital assets’ climate impact 3īecause CBDCs have the potential to significantly impact cross-border payments and displace existing currencies, the Executive Order also calls on the Secretary of the Treasury to take the lead in establishing an interagency framework for international engagement related to digital assets and CBDCs. With these reports in hand, the Attorney General will then provide a legislative proposal for issuing a US CBDC. To lay the groundwork for issuing a US CBDC, 2 the Executive Order calls on the Secretary of the Department of the Treasury (Treasury or Treasury Department), the Board of Governors of the Federal Reserve System, and the Attorney General to research and report on the economic, financial, monetary, national security, law enforcement, and legislative implications of a US CBDC. These concerns animate and instruct the following stated goals: The Executive Order notes the Administration’s concerns with, among other things, addressing consumer and investor protection financial stability illicit finance US leadership in the global financial system and economic competitiveness financial inclusion and responsible innovation. 1 Simply put, for those in the digital asset business – from investors to service providers, NFT holders to large financial institutions, and many more – the Executive Order is critical in understanding how US regulation of such assets will develop in the coming years. On 9 March 2022, the Biden Administration issued its long-awaited Executive Order on Ensuring Responsible Development of Digital Assets seeking to establish a unified US federal government approach to the regulation of digital assets.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |