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The new Executive Order on Ensuring Responsible Development of Digital Assets marks the first ever ‘whole-of-government approach’ to address the risks and potential benefits of digital assets. The order signals a willingness by the Biden administration to embrace the sector.
President Biden signed Executive Order on Ensuring Responsible Development of Digital Assets on March 21, 2022. In an accompanying fact sheet published by the White House the same day, the Executive Order identifies seven key priorities as follows:
- Protection of US consumers, investors, and businesses: In the Executive Order, the President directed the US Treasury to assess and develop sound policy and recommendations to address the “growing digital asset sector and changes in financial markets for consumers, investors, and businesses, while promoting equitable economic growth.”
- Protection of US financial stability and mitigation of systemic risk: The President directed the Financial Stability Oversight Council to identify risks and mitigate systemic risks which are posed by digital assets. Additionally, the Executive Order directs the agency to develop recommendations to address regulatory gaps.
- Mitigation of illicit finance and national security: The Executive Order directs all relevant US Government agencies to work in an “unprecedented focus of coordinated action” in an effort to mitigate all risks that are associated with the use of digital assets.
- Promotion of US leadership in the global financial system: The Executive Order directs the US Department of Commerce to establish a framework in which government agencies will use to promote U.S. technology and economic competitiveness.
- Promotion of equitable access to safe financial services: The Executive Order directs the US Secretary of the Treasury to produce a report on digital money and payment systems. The report would include the “implications for economic growth, financial growth and inclusion,” and risks associated with those communities that have a long history of insufficient access to affordable financial services.
- Support of the US Government to ensure technological advances and responsibly development of digital assets: The Executive Order directs all government agencies to take clear steps in developing and implementing digital asset systems while simultaneously protecting security, data privacy, and the exploitation of investors.
- Exploration of a US Central Bank Digital Currency (CBDC): The Executive Order lastly directs government agencies to analyze the current technological infrastructure, framework, and capacity for a potential CBDC, which would protect Americans’ financial interests.
As such, the US government is clearly working across its agencies and with Congress to establish policies that guard against the numerous risks which are inherent with digital assets. This represents a good faith effort by the President to develop and guide responsible innovation to develop international capabilities to study and support technological advances in the digital asset sector.
How Bovill Newgate can help?
Bovill Newgate’s team of professionals can help tailor your compliance program to its business and to keep in line with industry best practices and updates to the ever-growing area of digital asset compliance. Bovill Newgate provides support to FinTech organizations by performing independent annual controls testing assessments. We can also help build your compliance program and identify the areas and registrations required based on your crypto and digital asset activities. Lastly, with regard to FINRA member broker-dealers, we also assist firms during their FINRA examination, to best respond and remediate any identified risk.
