Experts in the cryptocurrency and blockchain technology industries said today that they are watching with keen interest the results of a Biden administration executive order issued in March on the risks and rewards of assets. to assess whether the federal government and Congress will take meaningful action. regulatory changes that would benefit the sectors.
The executive order takes broad momentum to address the risks and benefits of digital assets and encourages federal regulators to consider monitoring these assets to guard against systemic financial risks they could impose. The order, the White House said earlier this year, outlines the “first-ever whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets” and the technologies that support them.
In carrying out the guidelines of the order, various federal agencies will consider a wide range of issues, including consumer and investor protection; financial stability; illicit financing; leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
In particular, the decree entrusts several agencies with exploratory work which could lead to regulatory changes. Among these, the ordinance requires:
- The Treasury Department “to address the implications of the growth of the digital asset industry and changes in financial markets for consumers, investors, businesses, and equitable economic growth”, and to study financial stability and risks related systems;
- Various agencies to coordinate risk mitigation and work with allies and partners “to ensure international frameworks, capacities and partnerships are aligned and responsive to risk”;
- The Commerce Department “will work across the U.S. government to establish a framework to drive U.S. competitiveness and leadership and leverage digital asset technologies”; and
- The Federal Reserve will “continue its research, development and evaluation efforts” for a US central bank digital currency (CBDC) “including the development of a broader US government action plan to support for their work.
EO, SEC impacts
At today’s DC Blockchain Summit event in Washington hosted by the Chamber of Digital Commerce, the group’s founder and CEO, Perianne Boring, said she expects reports from federal agencies arising of the executive order are far from the final word on any possible policy change, as the reports will likely call on Congress to act.
“It is likely that many [the reports] will have recommendations that Congress will have to present,” she predicted.
“As someone who worked in Congress, I can tell you this is going to be a multi-year process, so don’t expect any major policy changes this year, it’s going to take a while,” Boring said.
Looking across the federal landscape, she singled out the Securities and Exchange Commission (SEC) as the “number one blocker of this industry, having economic progress and bringing an economic boom to this country that we haven’t seen in years.” decades”.
Boring said the SEC has been slow to act on a number of fronts that would bring regulatory clarity and drive market growth.
“We need a basic definition from the SEC of what a digital asset security is, [and] what is within your jurisdiction and what is not,” she said. “It’s really not a complicated question to answer, but they refused to give advice…they’ve been dragging their feet on this for years.”
“We need a spot crypto ETF [exchange traded fund]. How can you have futures ETFs but not an equity ETF? It makes no sense and often hurts investors in incredible ways,” she said.
On these and other issues, Boring said “there are things agencies like the SEC can do immediately, but they have refused to do so.”
“Hopefully this executive order will set up a process and get Congress to do this, but it will take longer than expected,” she said.
Congressional interest is high
Meanwhile, Congress is not waiting for the findings of the executive order to move the legislation forward. Speakers at today’s event counted around 40 crypto and blockchain-related bills currently pending in Congress.
Rep. Darren Soto, D-Fla., who delivered a virtual keynote address to attendees, spoke about two pieces of legislation — the Token Taxonomy Act which aims to keep blockchain technology growing in the United States — and the Digital Taxonomy Act introduced by Rep. Soto who would order the Federal Trade Commission (FTC) to report on the agency’s actions related to digital tokens.
One of the purposes of the legislation, he said, is to “define what a digital asset is” in the jurisdictions of various federal agencies, including the SEC, FTC and Commodities Futures Trading Commission (CFTC). ).
“We’re also working with the Digital Chamber on the Digital Commodity Exchange Act to really refine the CFTC’s role as the primary regulator of the exchange,” he said, adding that it’s “something we applaud the Digital Chamber for working with us.”
Rep. Soto also applauded the Biden administration “for bringing forward an executive order to put pen to paper for agencies so that we can get the agency input that we badly need — and have been waiting for a while — so that we can finally get those bills moving.