A Framework for Responsible Development of Digital Assets

October 7, 2022

The Biden Administration recently shared an update to the President’s executive order in March 2022. The original directive outlined the first whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. Several agencies have worked together to create a framework for the responsible development of digital assets that advance six key priorities.

On September 16, 2022, the White House issued a fact sheet outlining the progress. These are the areas, with actionable steps, shared to date:

Promoting Access to Safe, Affordable Financial Services

  • Encouraging agencies to adopt instant payment systems
  • Creating a federal framework to regulate nonbank payment providers
  • Designing a digital asset ecosystem to ensure a usable, inclusive, equitable, and accessible structure

Fostering Financial Stability

  • Work with financial institutions to bolster their capacity to identify and mitigate cyber vulnerabilities
  • Identify, track, and analyze emerging strategic risks

Advancing Responsible Innovation

  • Develop a Digital Assets Research and Development Agenda
  • Develop methods of informing, educating, and training diverse groups of stakeholders
  • Tracking digital assets’ environmental impacts
  • Establishing a standing forum to convene federal agencies, industry, academia, and the community

Reinforcing US Global Financial Leadership and Competitiveness

  • Continue and expand leadership roles in digital assets work at international organizations and standard-setting bodies
  • Increase collaboration with, and assistance to, partner enforcement agencies in foreign countries
  • Further technical assistance to developing countries
  • Assist cutting-edge U.S. financial technology and digital asset firms to find a foothold in global markets for their products

Fighting Illicit Finance

  • Amend relevant federal statutes to penalize or prosecute criminals
  • Complete an illicit finance risk assessment on decentralized finance
  • Disrupt illicit actors and address the abuse of digital assets
  • Enhance dialogue with the private sector

Exploring a U.S. Central Bank Digital Currency (CBDC)

  • Lead an interagency working group to consider the potential implications of a U.S. CBDC
  • Leverage cross-government technical expertise and share information with partners.

Delivery of the new policy agenda removes a key source of uncertainty for an industry that has already been rocked by numerous regulatory hiccups and scandals. Implementation timelines have not yet been announced. The devil is always in the details. The responsible development of digital assets will drive innovation forward.

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