The White House described the executive order as the government’s first comprehensive approach to addressing the risks and harnessing the potential benefits of digital assets and its underlying technology.
“The rise in digital assets creates an opportunity to enhance American leadership in the global financial system,” the White House said in a statement describing the matter. But it also has major implications for consumer protection, financial stability, national security, and climate risk.
Among other actions, the order directs the Commerce Department to develop a comprehensive framework to drive competitiveness and leadership in the United States, and leverage digital asset technologies.
The order also encourages the Federal Reserve’s ongoing research into a US-backed cryptocurrency, sometimes called a digital dollar.
Regulators have called for a coordinated regulatory response since at least last year, in part because of the many disparate agencies affected.
Consumer banking, investments, and enforcement of sanctions are handled by separate arms of the federal government, all of which approach cryptocurrency in different ways.
It would have no immediate impact on how cryptocurrency is regulated or how cryptocurrency companies operate, and instead initiates a slower regulatory process that could take years to bear fruit.
The first plan to regulate cryptocurrency across multiple federal agencies
In particular, the order directs agencies to assess the risks and opportunities involved in using cryptocurrency. Including the Treasury and the Securities and Exchange Commission. This move is likely to lead to future regulations being issued through the notice and comment process.
The industry’s early reaction to the matter was positive. The industry sees the new framework as a way to avoid regulatory uncertainty.
“As agencies take the next step in examining the many dimensions of the crypto economy, we hope they do so with a focus on establishing regulatory clarity for the industry and the American public,” Farrer Sherzad, chief policy officer at Coinbase, said via Twitter. Digital assets have enormous potential economic and social benefits for countries that put in place reasonable legislation.