Regulatory policy

Executive Order Launches Comprehensive U.S. Digital Asset Policy and Action Plan | BakerHotelier

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  • The Executive Order on Ensuring Responsible Development of Digital Assets (EO) recognizes the significant impact that cryptocurrencies, digital assets and blockchain technology have had and will have on financial services and acknowledges that the United States has an interest in promoting responsible innovation and mitigating risk in these new markets.
  • The OE expresses the intention of the United States to develop a coordinated federal approach to understanding the opportunities and risks of digital assets and regulating digital assets.
  • The EO calls for research to explore potential options for designing and deploying a US central bank digital currency (CBDC) if deemed to be in the national interest.
  • The EO defines the following terms: blockchain, central bank digital currency, cryptocurrencies, digital assets and stablecoins.
  • The EO directs multiple agencies to assess the impact of digital assets and possibly strengthen investor and market protections, which may lead to increased enforcement actions against companies that operate in these markets.


On March 9, 2022, President Joe Biden signed the Executive Order on ensuring responsible development of digital assets (EO) and the White House published a correspondent fact sheet summarizing the main related policy objectives. As discussed in more detail below, this is a historic moment for the US cryptocurrency market.


The OE defines a national policy for digital assets, with six key objectives:

1. Protection of consumers, businesses and investors

Consumer protection is a priority. The EO states that digital assets create new and increased risks of certain crimes and other violations of law, breaches of privacy and data, unfair and abusive acts or practices and other cyber incidents faced by consumers, investors and businesses, and it focuses largely on the need for monitoring, standards and consumer protection. (Art. 2(a) and 5(a).)

2. Financial stability and systemic risk mitigation

Digital asset companies should be regulated. The EO notes that some digital asset trading platforms and service providers operate outside of the US regulatory regime and clarifies that they, as well as digital asset issuers and intermediaries, should be regulated as “Traditional market infrastructures and financial companies”. (Art. 2(b).)

3. Mitigate national security and illicit finance risks

Digital assets can pose significant illicit financial risks. The EO states that digital assets can be used for criminal purposes such as money laundering, terrorism and proliferation financing, fraud and theft schemes, corruption, cybercrime and ransomware, narcotics, human trafficking and circumvention of U.S. and foreign financial sanctions. (Art. 2(c) and 7(a).)

Regulation and enforcement are key. The OE calls for a significant increase in regulatory, oversight and enforcement measures to mitigate illicit finance and national security risks. (Art. 7(a).)

More controls and accountability are needed. The OE notes the growth of “decentralized financial ecosystems, peer-to-peer payment activities, and obfuscated blockchain ledgers” and advocates for the development of controls and accountability to “mitigate illicit finance and national security risks” and “ to promote high standards for transparency, confidentiality and security. (Art. 2(c).)

4. Promoting U.S. Leadership and Competitiveness in the Global Financial System

The United States will seek international cooperation. According to the EO, “[u]Even regulation, supervision and compliance between jurisdictions create opportunities for arbitrage and increase risks to financial stability and the protection of consumers, investors, businesses and markets” in the United States and abroad . For example, the OE notes that “[i]Insufficient AML/CFT [anti-money laundering/combating the financing of terrorism] regulation, supervision, and enforcement by other countries challenges the ability of the United States to investigate illicit digital asset transaction streams that frequently jump overseas, as is often the case in ransomware payments and other cybercrime-related money laundering. (Art. 8(i).)

5. Promotion of financial inclusion

Calls for fair and affordable financial services. The EO discusses the need for safe, affordable, and accessible financial services, and to mitigate the disparate impact of financial innovations on Americans. (Art. 2(e) and 5(a).)

6. Guarantee responsible innovation

Calls for regulation to ensure responsible innovation. “The United States has an interest in ensuring that digital asset technologies and the digital payments ecosystem are developed, designed, and implemented in a responsible manner, including privacy and security” and “defending[s] against illegal logging and reduces negative impacts on the climate. (Art. 2(f).)

Leave “responsible innovation” undefined. The EO leaves open the questions of what “responsible innovation” means and who decides whether this standard is met.


The United States will seriously evaluate a CBDC. “[The] The administration places the utmost urgency on research and development efforts into potential options for designing and deploying a CBDC in the United States. These efforts should include… actions necessary to launch a CBDC in the United States if deemed to be in the national interest. (Sec. 4(a)(i).) The EO also urges the Federal Reserve to continue its research and development efforts with CBDCs and develop a plan to support government action related to these efforts.

Inter-agency reports

The OE orders various US agencies and interagency groups to submit numerous reports within 90, 120, 180, or 210 days regarding digital assets. The reports generally address CBDCs, economic and consumer opportunities and risks of digital assets, and combating illicit activities involving digital assets. You will find details of the reports here.

Key definitions

The EO provides definitions of the following terms: blockchain, central bank digital currency, cryptocurrency, digital assets, and stablecoins. Of particular note are the definitions of cryptocurrencies and digital assets.

According to the OE, cryptocurrency “refers to a digital asset, which may be a medium of exchange” and which is backed by cryptography. This definition appears to be similar to the definition of “convertible virtual currencies” set forth by the US Financial Crimes Enforcement Network.[1]

In contrast, the EO defines digital assets as “all CBDCs, regardless of technology used” and specifically includes cryptocurrencies and stablecoins in the definition of digital assets. The definition states that “regardless of the label used, a digital asset may be, among other things, a security, commodity, derivative or other financial product”. This broad definition appears to focus on CBDCs and assets that fall under the regulatory authority of the United States Securities and Exchange Commission and/or the United States Commodity Futures Trading Commission.


EO has been considered a game changer for digital assets and blockchain technology. Specifically, some commentators hope that a comprehensive federal approach will help streamline regulation and minimize potential overlapping jurisdictions that could stifle innovation. Other commentators worry that many time-consuming studies, as noted in the OE, will lead to long delays in establishing a coordinated regulatory regime. The BakerHostetler Blockchain Technologies and Digital Assets team has members in all of our major groups, and our attorneys have extensive experience in all areas of the blockchain and cryptocurrency markets, including investigations, securities law securities, commodities law, BSA/AML compliance, taxation, confidentiality. , transactions, advertising law, intellectual property and technology design, as well as government affairs, public policy and advocacy with federal departments and agencies and Congress. Do not hesitate to contact one of our experienced professionals if you have any questions regarding this alert.

[1] FIN-2019-G001 (“virtual currency” refers to a medium of exchange that may function as currency but does not have all of the attributes of “real” currency, as defined in 31 CFR § 1010.100 (m), including legal tender status … [convertible virtual currency] is a type of virtual currency that either has an equivalent value as currency or acts as a substitute for currency, and is therefore a type of “value that substitutes for currency”. »

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