Biden to sign order clearing way for crypto oversight
President Joe Biden will sign an executive order as soon as midweek to marshal resources across the government to develop a sweeping plan to oversee cryptocurrencies, including whether the U.S. should issue a fully virtual version of the dollar, according to two people familiar with the document.
The long-awaited order will call on federal agencies to complete a series of studies over the next nine months. Biden will direct federal agencies to collaborate on analyzing the merits of a so-called central bank digital currency, which would be issued by the Federal Reserve. The potential arrival of a digital dollar would have significant consequences for global payment systems, domestic commerce and the banking industry.
The U.S. has trailed some foreign governments in creating a regulatory framework for digital asset markets that have swelled to more than $1.7 trillion after lightning-fast growth in recent years. While Biden's order will stop short of directing policy, it's an important step toward providing clarity for an industry that has already disrupted traditional banking and payment systems. Still, it may face resistance from many in the industry, who argue that the whole point of cryptocurrency is to avoid government control.
The document is expected to further unleash a wave of lobbying from banking and commercial sectors — to say nothing of well-funded crypto businesses that have been building a presence in Washington over the last year.
“This is the starting gun,” one person with direct knowledge of the order’s contents said in an interview.
The Fed in January kicked off a public consultation on whether it should issue a digital dollar, which would mimic physical cash by allowing a person or business to transfer money directly to someone else without using a private bank account. The Boston regional Fed branch also released preliminary research into how a central bank digital currency might work from a technological standpoint, concluding that it was possible to pull off such a project.
The central bank digital currency study mandated by the order will include input from the Treasury Department, Justice Department, Commerce Department, Department of Homeland Security, Office of Management and Budget and the Office of the Director of National Intelligence.
The Attorney General’s office is also being tasked with studying if new legislation is required for a digital dollar, and the Office of Science and Technology Policy will investigate technical requirements.
The Environmental Protection Agency and Office of Science and Technology Policy will conduct a study on the environmental impact of digital assets. The State Department will be directed to develop ways to cooperate with international authorities on crypto policy.
The document also calls on the Financial Stability Oversight Council, a panel chaired by Treasury Secretary Janet Yellen and made up of different independent regulators, to study what effect digital assets are having on financial stability. And agencies will be asked to examine what steps might need to be taken to mitigate crypto’s use for illicit finance.
The White House declined to comment.
