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President Biden Signs Executive Order Regarding Digital Assets

On March 9, 2022, President Biden signed a broad and landmark executive order indicating his administration’s strategy regarding digital assets, which include increased regulation and oversight of cryptocurrency as well as prioritizing the exploration of a central bank digital currency. This marks the first occasion on which the Biden administration has officially addressed cryptocurrency. Although the executive order is essentially tasking the Treasury Department and other regulatory agencies with making plans and reports, it’s still a pivotal moment for the Biden administration and the nation as a whole.

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Directives Within The Executive Order

The Executive Order on Ensuring Responsible Development of Digital Assets indicates several directives.

Primarily, the Secretary of the Treasury has been directed to submit a report to Mr. Biden discussing the future of the U.S. dollar and payment systems, including an analysis of a digital dollar through a central banking agency. In consultation with the U.S. Securities and Exchange Commission (SEC) and other financial regulatory agencies, the Secretary of the Treasury is also directed to report regarding the implications of developing and adopting digital assets and currency, and how this would change the financial and payment system infrastructures for people within the United States, including consumers, investors, and businesses.

Additionally, the executive order encourages the SEC and other financial regulators to consider “the extent to which investor and market protection measures within their respective jurisdictions may be used to address the risks of digital assets and whether additional measures may be needed.”

Among other directives, the Financial Stability Oversight Council (FSOC) is tasked with producing a report and recommendations on how to address the financial stability risks and regulatory gaps that can result from digital assets.

Response To Executive Order

The response to the order has ranged from skepticism to cautious optimism. National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan made a joint statement in support of the order, stating that it will intensify their efforts to promote responsibility and innovation of digital assets, and that they believe it is important to mitigate any risks to consumers, investors and businesses, in order to promote increased financial stability.

Many lawmakers and American citizens do not currently embrace the idea of a digital currency, which refers to currency that is issued by a central bank and represented through some type of electronic record, although China and other world governments have moved forward with the idea. Among others, American Bankers Association President and CEO Rob Nichols indicated that there is concern that the executive order has directed federal agencies to begin the pursuit of a central bank digital currency before they have determined whether this digital currency is even in the national interest, as the order requires. However, the House Financial Services Committee plans a hearing on March 29 that will begin to explore the benefits and risks of a central bank digital currency.

Most Republican lawmakers remain skeptical about the idea of a central bank digital currency. Rep. Patrick McHenry of North Carolina, who serves on the House Financial Services Committee, stated the importance of Congressional legislation and bipartisan solutions, and urged President Biden to work with lawmakers from both parties as well as market participants.

Democratic Senator Sherrod Brown, in contrast, praised the executive order as a way to protect Americans from the risks of cryptocurrency and to ensure that digital currencies such as cryptocurrency will not be used to circumvent the law.

Cryptocurrency & Tax Advice From Arizona’s Leading Tax Attorney Firm

Are you looking for legal advice regarding cryptocurrency and your tax returns? Or maybe you have been contacted by the IRS about your cryptocurrency and aren’t sure where to turn. Silver Law PLC is an experienced Arizona tax attorney firm with the experience and knowledge you need. We will aggressively represent you and protect your rights. To schedule your confidential case review, contact our office today.

 

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