New Improvement in U.S. Nationwide Cryptocurrency Coverage Could Have Huge-Ranging Impression | Crowe & Dunlevy

On March 9, President Biden signed a first-of-a-kind Govt Order (and accompanying Reality Sheet) that instantly impacted cryptocurrency markets and gave American companies and traders a sign of impending regulatory adjustments. The Order seeks to develop American financial coverage to handle cryptocurrency’s latest however materials influence on the world economic system.

Cryptocurrency has been steadily rising in the USA, and 16% of People have invested in, traded, or used cryptocurrency.¹ However digital foreign money isn’t simply rising in the USA with “[o]ver 100 nations” exploring the usage of cryptocurrency as their sovereign foreign money² and El Salvador formally adopting Bitcoin as a authorized tender.³ Due to these developments, the Biden Administration believes there is a chance to strengthen American management within the international monetary system, however solely by enacting new coverage priorities.

The March 9 Govt Order identifies new U.S cryptocurrency insurance policies throughout six key priorities:

1. Shopper and investor safety;
2. Monetary stability;
3. Illicit finance;
4. U.S. management within the international monetary system and financial competitiveness;
5. Monetary inclusion; and
6. Accountable innovation.

Many of the directives within the Govt Order are to develop coverage suggestions for later consideration. Nevertheless, two notable directives are to proceed the exploration of creating a U.S. Central Financial institution Digital Foreign money (CBDC) and to mitigate the dangers associated to cryptocurrency, together with privateness, knowledge safety, and cybersecurity.⁴

The Govt Order acknowledges client privateness dangers and the necessity for safeguards to “protect in opposition to arbitrary or illegal surveillance, which may contribute to human rights abuses.”⁵ As well as, one other coverage goal outlined within the Govt Order is to make sure that companies working with digital belongings present satisfactory protections for delicate monetary knowledge.⁶ Lastly, the cybersecurity points at main digital asset exchanges and buying and selling platforms should be tackled to keep away from previous points which have “resulted in billions of {dollars} in losses.”⁷

These coverage directives are unlikely to alter federal regulatory obligations or enforcement within the instant future. Nevertheless, the place companies have discretion below the present regulatory scheme, companies ought to pay attention to the brand new nationwide crypto coverage directives.