Client Alert: White House Issues First-Ever Executive Order on Crytpocurrency
On March 9, 2022, President Biden signed a highly-anticipated Executive Order on cryptocurrency (titled “Ensuring Responsible Development of Digital Assets”). […]
On March 9, 2022, President Biden signed a highly-anticipated Executive Order on cryptocurrency (titled “Ensuring Responsible Development of Digital Assets”). Really more of a plan to make a plan, the most impactful aspect of the Executive Order may be its mere existence. While the Order was short on specifics, it marks the first time the White House has formally weighed in on the emerging world of cryptocurrencies, largely signaling that these digital assets are here for the long term and that the federal government will have a role in their use and regulation.
The Order sets out six priority areas in developing a national policy: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
The Order further tasks a broad array of federal agencies—from the expected in the Treasury, State, Commerce and Justice departments, to the less expected, in the Labor Department, Environmental Protection Agency, and Agency for International Development—with studying these issues and drafting an action plan to address them.
One headline grabber of the Order is that it directs federal agencies to look into the pros and cons of a central bank digital currency, or a “digital dollar.” Doing so potentially captures some of the benefits of cryptocurrencies by lowering transaction costs and increasing access, while offering more protections than non-state backed cryptocurrencies. A central bank digital currency, however, is in some ways the very antithesis to what some early adopters viewed as one of the biggest advantages and goals of cryptocurrencies—the decentralization of power and economic control.
In a less heralded but equally important move, the Order also gives a nod to the underlying blockchain technology and the independent role this technology can play in U.S. policy. Specifically, the Order directs federal agencies such as the Office of Science and Technology Policy and the Secretary of Energy to look into the potential use of blockchain technology in creating a market for greenhouse gas emissions and environmental assets and improving the management of the electrical grid.
Ultimately, the Executive Order amounts to more of an enticing movie trailer than an in-depth declaration of policy. We should learn a lot more in the next six months as the agencies complete their directives and return their recommendations to the White House, including potential legislative proposals. Gelber, Schachter & Greenberg, P.A. will continue to provide analysis and guidance as the premiere date approaches.