The United States strengthens digital asset regulatory coordination, Biden encourages the Fed to evaluate the "digital dollar"

Governments around the world are strengthening the supervision of digital assets in the name of "digital currency", and the latest statement is the United States.

On March 9, local time, U.S. President Biden signed an executive order called Ensuring the Responsible Development of Digital Assets, requiring the country’s government agencies to coordinate digital asset regulation.

White House officials added that this would safeguard the long-term effectiveness of areas such as anti-money laundering, and set the administration’s policy priorities for cryptocurrencies and future U.S. central bank digital currencies.

Instead of introducing new regulations, the aforementioned executive order requires U.S. federal government agencies — the Federal Trade Commission, SEC, CFTC, and others — to coordinate their oversight of digital assets.

Biden said advances in digital and distributed ledger technology for financial services have led to dramatic growth in the digital asset market, with far-reaching implications for protecting consumers, investors and businesses, including data privacy and security, financial stability and systemic Risk, crime, national security, etc.

According to data disclosed by the White House, in November 2021, the total market value of digital assets issued by non-states in the United States reached 3 trillion US dollars, compared with about 14 billion US dollars in early November 2016.

“Some digital asset trading platforms and service providers are rapidly growing in size and complexity and may not be subject to or comply with appropriate regulations or oversight.” The White House said that digital asset issuers, exchanges and trading platforms, and their activities may Intermediaries that increase financial stability risks should, as appropriate, accept and comply with the regulatory and supervisory standards governing traditional market infrastructures and financial firms in accordance with the general principle of "same business, same risk, same rules".

The executive order stated that within 180 days, relevant federal agencies will conduct a study and report on the pros and cons of a digital dollar.

The content of the report should include: the current conditions for the promotion and adoption of digital assets, possible design options for the digital dollar; the impact of the digital dollar on national interests, financial inclusion, and relationships between the private sector; the impact of digital currencies issued by other monetary authorities on the status of the U.S. financial center level of influence, global sovereignty and the future of private currencies, etc.

The White House said it encouraged the Federal Reserve to continue studying “the extent to which a digital dollar can improve the efficiency and reduce costs of existing and future payment systems,” in order to continuously evaluate the appropriate form of the digital dollar and formulate, as appropriate, for the Federal Reserve and broader U.S. government action. A strategic plan, while evaluating the necessary steps and requirements for a possible implementation and launch of a digital dollar.

The Federal Reserve has been working on issuing a digital dollar.

But it has said several times that it will not move forward with an official digital currency unless it has the backing of the White House and Congress.

On February 3, the Boston Fed and the MIT Digital Currency Initiative released a report summarizing the results of the first phase of a digital currency exploratory research project that the two parties are cooperating.

The project tested two possible digital dollar codes, aiming to ensure transaction throughput per second.

Countries around the world are increasing the regulation of digital assets. In addition to the US, countries such as Singapore and the UK are racing to adopt standards that oversee the industry, from licensing exchanges to curbing misleading advertising. (21st Century Business Herald)