On March 9, 2022, U.S. President Joe Biden signed a long-awaited executive order on cryptocurrencies, which the White House described as a “historic” move to establish a national policy for digital assets across six key priorities. The order marks the first-ever whole-of-government approach to addressing both the risks and the potential benefits of digital assets and their underlying technology.
The Six Priorities in Detail
1. Protecting U.S. Consumers, Investors, and Businesses
The order directs the Treasury Department and other agencies to assess and develop policy recommendations aimed at safeguarding participants in the digital asset ecosystem, including measures against fraud, market manipulation, and data breaches.
2. Protecting U.S. and Global Financial Stability
Agencies are tasked with evaluating systemic risks posed by digital assets, such as stablecoin runs, crypto market volatility, and potential contagion to traditional finance. The Financial Stability Oversight Council will play a key role in identifying emerging threats.
3. Mitigating Illicit Finance and National Security Risks
The White House emphasized an “unprecedented focus of coordinated action” across all relevant U.S. government agencies to combat the use of digital assets for money laundering, ransomware payments, terrorist financing, and sanctions evasion. International cooperation with allies is also a core component.
4. Promoting U.S. Leadership in Technology and Economic Competitiveness
The Commerce Department is directed to establish an appropriate framework to ensure that the United States remains at the forefront of blockchain and digital asset innovation, reinforcing its leadership in the global financial system.
5. Supporting Technological Advances and Responsible Development
The order encourages continued research and development of digital asset technologies while ensuring they are developed and deployed responsibly, taking into account privacy, energy consumption, and inclusivity.
6. Exploring a U.S. Central Bank Digital Currency (CBDC)
For the first time, the executive order elevates CBDC exploration to an “urgent national interest.” The Treasury, the Federal Reserve, and other agencies are to conduct research and develop policy recommendations for a potential digital dollar, with a focus on interoperability, privacy, and financial inclusion.
Treasury and Secretary Yellen’s Role
Among the six priorities, “promoting equitable access to safe and affordable financial services” is a cross-cutting goal. Treasury Secretary Janet Yellen will lead an interagency process and must submit a report to the President within 180 days on the future of money and payment systems. Yellen stated: “President Biden’s historic executive order calls for a coordinated and comprehensive approach to digital asset policy.” She added that the Treasury would build upon recent National Risk Assessments to identify key illicit financing risks associated with digital assets.
SEC Chairman Weighs In
SEC Chairman Gary Gensler issued a statement welcoming the executive order, saying, “I look forward to collaborating with colleagues across the government to achieve important public policy goals: protecting investors and consumers, guarding against illicit activity, and helping ensure financial stability.” Gensler has previously called for expanded SEC oversight of crypto markets, and the executive order is expected to accelerate rulemaking.
Industry observers view this order as a watershed moment for U.S. crypto regulation. By establishing a whole-of-government framework, the Biden administration aims to provide clarity for market participants while positioning the United States as a leader in the global digital asset economy. The order also sets the stage for potential legislation, as Congress considers various bills covering stablecoins, market structure, and crypto taxation.