On March 9th, the Biden Administration released an Executive Order (EO) outlining a whole-of-government approach to address risks stemming from the growth of digital assets and blockchain technology while supporting responsible innovation. The EO focuses on six key priorities: (1) consumer and investor protection; (2) financial stability; (3) illicit finance; (4) US leadership in the global financial system and economic competitiveness; (5) financial inclusion; and (6) responsible innovation.
To advance these key priorities, the EO calls for a number of reports, studies and plans, including reports from the Treasury Department (Treasury) within 180 days on (1) the future of money and potential impacts of a US central bank digital currency (CBDC); and (2) policy recommendations around consumer protection and financial inclusion issues. It also calls for the Financial Stability Oversight Council (FSOC) to produce a report within 210 days on financial stability risks and regulatory gaps.
The EO also sets up an interagency process for coordinating the directed actions and calls for Treasury to establish a framework for international cooperation on digital asset priorities.
While the EO does not contain any concrete policy recommendations, it reveals several noteworthy (and somewhat surprising) stances from the Biden Administration, including a relatively warm stance toward “responsible innovation” in the digital asset space and the description of CBDC development as having the “highest urgency.” It also sets in motion a lengthy process that may lead to a more comprehensive digital asset regulatory framework, providing much-needed clarity for market participants. The full extent of this impact, however, may be muted as several potential outcomes such as CBDC issuance and expansion of regulatory authority would likely require Congressional authorization.
Read our First Take on the implications of the Executive Order and outlines key steps that firms should be doing now:
A publication of PwC's financial services regulatory practice
Financial Services Institute Leader, Cyber, Risk & Regulatory, PwC US
Banking and Capital Markets Leader, PwC US
Cyber, Risk and Regulatory Marketing Lead Partner, PwC US