Factbox: Key takeaways from Biden’s executive order on cryptocurrencies

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March 9 (Reuters) – U.S. President Joe Biden on Wednesday signed an executive order requiring the government to assess the risks and benefits of creating a central bank digital currency – the electronic equivalent of cash in your pocket – as well as other cryptocurrency issues. Read more

Here are some key points:

Central Bank Digital Currency (CBDC)

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The Biden administration has ordered the Treasury Department, along with other key agencies including the Justice and State Departments, to submit a report by September to the White House analyzing the potential costs and benefits. of a digital dollar.

The executive order specifically requested that the report focus on how a digital dollar could improve financial inclusion, what implications it could have on economic growth, and how foreign digital dollars could impact the status of the greenback in as the world’s reserve currency.

He also encouraged the Federal Reserve to continue its ongoing research into the possibility of a digital dollar and to “develop a strategic plan” for how a US CBDC could be implemented.

As part of the order, the Attorney General will need to assess whether legislation would be required to run a digital dollar and draft a legislative proposal taking into account ongoing Fed and Treasury research into this effort.

Risks and opportunities related to other digital assets

Biden’s EO also instructed key financial regulators including the US Treasury, Fed, Securities and Exchange Commission, consumer watchdog and banking regulators to produce within about four to six months. public reports on the implications of U.S. digital assets in general, as well as how changes in financial market and payment system infrastructure would likely impact consumers, investors, businesses, and economic growth.

It also instructs the agencies to outline the conditions that would lead to “mass adoption of different types of digital assets” and the associated risks and opportunities.

The order instructed regulators to focus on how technological innovation can impact the larger goal of introducing crypto assets “with an eye on the most vulnerable.”

The role of crypto in illicit finance

The growing popularity of digital assets could increase the risk of them being used to launder money, fund terrorist groups and facilitate cybercrimes, the Biden administration has warned.

As such, the EO has asked the Treasury Department, Director of National Intelligence, and Department of Homeland Security, among others, to detail how cryptocurrencies could be used in illicit finance and form a plan. coordinated action to mitigate risks.

The Treasury Department should use this action plan, along with other interagency research, to form the basis of any regulations needed to determine how cryptocurrencies might aid illegal activity, the White House said.

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Reporting by Katanga Johnson and Hannah Lang in Washington

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