PRESIDENT BIDEN SIGNS EXECUTIVE ORDER ON DIGITAL ASSETS
Executive Order on Ensuring Responsible Development of Digital Assets (3/9/2022)
President Joe Biden on March 9, 2022, signed a sweeping executive order setting out his administration’s digital asset strategy, which includes exploring greater regulatory oversight of cryptocurrency markets and prioritizing the assessment of a Central Bank Digital Currency (CBDC).
Among numerous other directives in Executive Order on Ensuring Responsible Development of Digital Assets, the Secretary of the Treasury must submit a report to the president on the future of money and payment systems, including an analysis of a U.S. CBDC. The Secretary of Treasury would also need to report to the president, in consultation with the SEC and other agencies, “on the implications of developments and adoption of digital assets and changes in financial market and payment system infrastructures for United States consumers, investors, businesses, and for equitable economic growth.”
The SEC and other financial regulators are also encouraged to consider “the extent to which investor and market protection measures within their respective jurisdictions may be used to address the risks of digital assets and whether additional measures may be needed.”
SEC Chair Gary Gensler, in a tweet on the executive order, wrote that he looks forward to “collaborating with colleagues across the government to achieve important public policy goals: protecting investors &; consumers, guarding against illicit activity, & helping ensure financial stability.”
Also under the order, the Financial Stability Oversight Council (FSOC) is tasked with producing a report recommending how to address financial stability risks and regulatory gaps posed by digital assets.
The executive order “marks an intensification of our efforts to promote responsible innovation in the digital assets space – innovation that works for all Americans, protects our national security interests, and contributes to our economic competitiveness and growth,” National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan said in a joint statement.
“Fundamentally, an American approach to digital assets is one that encourages innovation but mitigates the risks to consumers, investors, and businesses, broader financial stability, and the environment,” Deese and Sullivan said. “We are clear-eyed that ‘financial innovation’ of the past has too often not benefited working families, while exacerbating inequality and increasing systemic financial risk. This history underscores the need to build robust consumer and economic protections into digital asset development.”
Lawmakers have yet to embrace the idea of a CBDC, in which currency issued by a central bank is represented by a digital token or other form of electronic record, even as China and other governments move forward with their own digital currencies. The Biden order comes as the House Financial Services Committee is planning a March 29 hearing exploring the benefits and risks of a CBDC.
Have you dabbled in cryptocurrency? Are you a big investor? Either way, let us help you understand the tax implications of your investments.