Biden prepares executive order on digital assets, including security measures

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Citing the need for the U.S. government to address security issues with cryptocurrencies, as well as their role in the overall financial system, President Biden announced Wednesday that he’s preparing to sign an executive order on “responsible innovation” for digital assets.

A fact sheet released Wednesday morning by the White House called it “the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

The document lists seven areas of concern, including mitigating “illicit finance” and the related national security risks. Biden plans to mandate an “unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks.”

The executive order also will direct agencies “to work with our allies and partners to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks.”

Federal law enforcement agencies and financial regulators have been expanding their oversight of cryptocurrencies during the Biden administration. The Department of Justice announced earlier this year that it was beefing up its efforts to combat criminal use of crypto. This week the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance on how Russian entities might use digital assets to evade U.S. sanctions against Moscow for the invasion of Ukraine.

The White House said the executive order also will address consumer protection; potential systemic risk to the financial system; U.S. leadership in technology and economic affairs; equitable and safe access to financial services; support the “responsible development and use” of digital asset tech; and explore whether the U.S. should have a central bank digital currency.