As cryptocurrency gains in popularity, consumer protection and national security must remain top of mind. Our federal government is doing just that. E
As cryptocurrency gains in popularity, consumer protection and national security must remain top of mind. Our federal government is doing just that. Earlier this year, President Joe Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets, which addresses the mitigation of risks to consumers, businesses and the financial system and touches upon national security and climate issues raised by crypto.
Below, Michelman & Robinson, LLP identifies the most significant aspects of the executive order.
Cryptocurrency scams have cost countless consumers money. In response, the President’s executive order aims to minimize fraud with the development of policy recommendations and appropriate oversight.
The executive order also encourages regulators to pay close attention to downstream changes to financial markets created by the growth of the digital asset space. To protect against systematic financial risks, FSOC (the Financial Stability Oversight Council) is now tasked with addressing regulatory gaps and related concerns.
Mitigation of Illegal Use of Digital Assets
In addition, the federal government is focusing on measures to detect and protect against illicit actors who use digital assets to facilitate malfeasance. By way of the executive order, international agencies are called upon to work in coordination with the U.S. to minimize finance and national security risks posed by cryptocurrencies and to provide a worldwide framework to combat its unlawful use.
Digital Dollar Exploration
Of note, the executive order calls for the exploration of a central bank digital currency (CBDC); essentially, a digital dollar. It also tasks the Federal Reserve with continuing its own research on this topic, while the federal government assesses the infrastructure and capacity needed for a potential CBDC.
This year continues to be a monumental one in terms of the evolution of digital assets. the Corporate & Securities team at Michelman & Robinson, LLP will continue to monitor the space and report any further significant updates on the firm’s blog.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.