President Biden Issues Executive Order on Cryptocurrencies, Taking Steps Toward Regulation
Entrepreneurs and investors in cryptocurrencies and other digital assets may finally receive guidance and clarity from the federal government.
On March 9, 2022 President Joe Biden issued the “Executive Order on Ensuring Responsible Development of Digital Assets” (the Executive Order), in which he called for a broad review of digital assets, including cryptocurrencies, citing the $3 trillion digital asset market cap as of November 2021 and a survey suggesting that upwards of 16 percent of American adults have invested in, traded, or used cryptocurrencies.
Crypto and blockchain industry participants should be sure to communicate with counsel frequently, as developments and updates may very well be coming piecemeal, and will almost certainly have significant effects on existing industry practice.
The Executive Order sets forth six main objectives:
- Consumer and investor protection;
- Financial stability;
- Mitigation of illicit finance and national security risks;
- U.S. leadership in the global financial system and economic competitiveness;
- Financial inclusion; and
- Responsible innovation.
The Executive Order also calls for continued research into a U.S. Central Bank Digital Currency.
The Executive Order represents the first whole-of-government approach to the benefits and risks of digital assets on the whole. Further, it serves as official recognition of the growing impact of digital assets and the federal government’s intent to regulate digital assets on the whole and cryptocurrencies specifically.
While the Executive Order does not have any direct, immediate implication, the looming arbiter of federal investigations, regulation, and oversight will likely have ripple effects throughout the crypto universe. Hopefully, the Executive Order signals the federal government’s desire to create a consistent, organized, and thoughtful approach to digital assets, which would be welcomed by the industry on the whole.
Dinsmore will continue to monitor this area and report on developments. If you have any questions, please contact the authors or your Dinsmore attorney.
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