On Wednesday, March 9, US president Joe Biden signed an executive order on “ensuring responsible development of digital assets” The order is an indication that crypto is accepted in the county and will be appropriately regulated. For a fact, the united state has shown to responsibly promote technological advances over the years, meanwhile, the present-day financial innovation which includes; cross-border payment and digital currency, safe and affordable financial services is not an exclusion.
In his speech, he addressed the pivotal concerns that had to do with accepting this financial innovation. “We must take strong steps to reduce the risks that digital assets could pose to consumers, investors, and business protections; financial stability and financial system integrity; combating and preventing crime and illicit finance; national security; the ability to exercise human rights; financial inclusion and equity; and climate change and pollution.”
With respect to the approval of the digital assets, some principal objectives were stated;
- Individual and business protection
Governmental protection cuts across every individual (consumer, investors) and businesses by ensuring strong cybersecurity, safeguarding and promoting the development of digital assets, maintaining privacy and shielding against unlawful operations.
- Global financial stability
Some cryptocurrency trading, exchange applications, and service providers expanding abruptly, with no compliance with appropriate regulations, can cause some financial havoc, which is why it is important to reduce the risk this may cause by subjecting them to regulatory and supervisory standards that govern financial firms. This act should be in line with the general principle of “same business, same risks, same rules.”
- Minimise illicit finance
Illegal use of digital assets includes money laundering, cybercrime, narcotics, ransomware, etc. However, crypto exchange and transaction is a peer-peer payment activity that if not properly controlled will lead to illicit finance.
- Mastery of the global financial system
Digital assets have steadied as technological and economic innovation. The United State has evolved with technological advances and also, by accepting this payment innovation will again set the pace that promotes democratic values, the rule of law, privacy of consumers, investors and businesses, and interoperability with digital platforms.
- Encourage safe and affordable financial services
By reducing the cost of cross-border payment, United States will be able to responsibly expand “equitable access to financial services thereby ensuring equal benefits of “financial innovation enjoyed equitably by all Americans.”
- Responsible Technological development
The use of digital assets or cryptocurrency is a dynamic way of technological refinement in a country and the decentralised ecosystem has helped shape the world generally by developing cross-border payment.
United State Pioneer Framework on Cryptocurrency Regulations
“Over the past six months, agencies across the government have worked together to develop frameworks and policy recommendations that advance the six key priorities identified in the EO”
However, United State released the first-ever extensive framework on cryptocurrency regulations. The regulation depicts ways in which financial services can make cross-border payment more convenient.
“The Biden-Harris Administration and independent regulators have worked to protect consumers and ensure fair play in digital assets markets by issuing guidance, increasing enforcement resources, and aggressively pursuing fraudulent actors.”
Also, the framework has the following regulators established for lawful practices:
- Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC)
- Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC)
- Financial Literacy Education Commission (FLEC)
As a way to implement digital assets into the financial system, the United State Government set up the treasury for the purpose of putting regulations into place.
The treasury is responsible for identifying and tackling cyber threats, also, “the treasury will work with other agencies to identify, track, and analyze emerging strategic risks that relate to digital asset markets.”
In addition to this, the United State will oversee the evolution of the decentralised ecosystem and its related illicit financing risks. Agencies will be assigned the responsibility to expose illicit operations and address the violation of digital assets. Also considering that “The President will evaluate whether to call upon Congress to amend the Bank Secrecy Act (BSA), anti-tip-off statutes, and laws against unlicensed money transmitting to apply explicitly to digital asset service providers—including digital asset exchanges and nonfungible token (NFT) platforms.”
On this note, a U.S. CBDC, the digital form of the U.S. dollar will be an effective payment system, supporting cross-border payment for every individual. It will promote equity among different consumers, foster economic growth, build against cyber threats and safeguard user’s data
Federal Reserve Chair Jerome Powell said “You wouldn’t need stablecoins; you wouldn’t need cryptocurrencies if you had a digital U.S. currency,”
The U.S CBDC can sustain the U.S. global financial leadership and promote technological advances
