The White House unveiled a “whole-of-government” approach to digital assets earlier this week.
U.S. lawmakers across the political aisle are praising President Joe Biden’s executive order on digital assets.
President Joe Biden unveiled the sweeping directive on Wednesday, ordering different parts of the federal government to coordinate their efforts to craft guidance for the rapidly growing industry, but refraining from setting specific policy objectives beyond consumer protection, responsible innovation and financial stability.
White House Press Secretary Jen Psaki described it as “the first-ever whole-of-government approach” to digital assets, noting that it also focuses on climate and national security concerns.
Read more: Here’s the Full Text of Biden’s Executive Order on Cryptocurrency
Both Democrat and Republican lawmakers have praised the effort.
Senator Pat Toomey (R-Pa.), the ranking member on the Senate Banking Committee, said he was “encouraged” by the administration’s acknowledgement of the sector and its growth. “As the White House itself stated, the U.S. must maintain its leadership in this space, which is why lawmakers and regulators should do nothing to harm America’s longstanding tradition of fostering technological innovation,” he said. Toomey further noted that the order directs departments to report their findings on certain issues to Congress, which “underscores the need for [the legislative branch] to enact a regulatory framework specific to digital assets.”
His Democrat counterpart, Banking Committee Chairman and Senator Sherrod Brown (D-Ohio), similarly praised the order, saying it is “imperative we strengthen our financial resilience and national security right now.” Preventing bad actors from using cryptocurrencies to evade the law is one such priority, he said.
“The President is right to take a whole-of-government approach to addressing cryptocurrencies and considering a central bank digital currency,” added Brown. “I look forward to working with the Administration and my colleagues in Congress to protect consumers, expand financial inclusion, and safeguard our national security.”
House Financial Services Committee Chairwoman and Congresswoman Maxine Waters (D-Calif.) called the directive “an important step” in understanding how the digital asset sector might shape the financial system and American society. She praised the call for further research into a central bank digital currency in particular, saying that people turned to crypto as an alternative to the financial system during the COVID-19 pandemic.
Waters: “With working families across the country looking to rebuild from the pandemic by turning to financial alternatives like cryptocurrency, ensuring that people are not vulnerable to fraud, manipulation, and abuse is imperative.” Her committee has already held a number of hearings on digital assets, noted Waters.
Congressman Patrick McHenry (R-N.C.), the ranking member on the House committee, echoed Toomey’s comments on Congress’s role in regulating digital assets. He called for bipartisan policies, noting that lawmakers from both major political parties have already begun looking at these issues.
“As Congress contemplates regulatory frameworks for digital assets, we must also fully acknowledge their benefits – like the important role they have played in ushering aid to Ukrainians – and their underlying technologies, which is largely missing in this announcement,” said McHenry.
He also pushed back against claims that crypto might be used by the Russian government or oligarchs to evade sanctions.
Senator Elizabeth Warren (D-Mass.), who sits on the Senate Banking Committee, has called on the Treasury Department to clarify how it will prevent crypto from being used as a sanctions evasion tool. In response to Biden’s executive order, she tweeted that she had “been ringing the bell on crypto,” reiterating these concerns.
Regulators who will be entrusted with actually implementing the executive order broadly spoke to the need for either supporting “responsible” innovation or preventing malicious actors from defrauding the innocent.
Commodity Futures Trading Commission Chair Rostin Behnam, who has lobbied Congress to give his agency crypto spot market oversight authority, said the order will “ensure greater cooperation” between independent market regulators, prudential (bank) regulators and cabinet departments.”
“With increased adoption and growth in the digital asset market comes the need for increased education and outreach to protect against new and emerging risks,” he said. “President Biden is right to emphasize the need for increased customer education and consumer protection, while combating illicit activity and safeguarding financial stability.”
Securities and Exchange Commission Chair Gary Gensler tweeted a more restrained statement, merely saying he looked forward to working with colleagues to address some of the concerns posed by the growth of the digital asset sector.
Rohit Chopra, the director of the Consumer Financial Protection Bureau, said his agency “is committed” to lowering the risks that may be posed by digital assets and protecting individuals from theft, fraud and other errors.
The Department of Homeland Security tweeted that the EO will “further our work to enable financial innovation” while lowering risks and noting that the Secret Service – which operates under Homeland Security’s auspices – leads the department in these efforts.
U.S. secretary of Commerce Gina Raimondo said in a statement that the order will “promote American leadership” in the field, noting that the sector has grown rapidly. Raimondo echoed other regulators’ comments on the potential risks to the financial system, but said the U.S. can promote the system’s resilience.
“I particularly welcome President Biden’s direction to engage with industry, civil society, and other interagency partners in developing a framework to promote U.S. economic competitiveness by leveraging digital asset technologies,” she said. “[I] remain eager to hear what we can do to promote the secure and inclusive development of this growing part of our financial services system.”
A Commerce Department spokesperson did not return a request for comment on the agency’s next steps.
Secretary of State Antony Blinken tweeted that digital assets can “benefit consumers and businesses if deployed correctly.”
In a joint statement attributed to National Economic Council director Brain Deese and National Security Advisor Jake Sullivan, the White House said the directive intensifies the U.S.’s ongoing efforts to oversee the crypto sector.
“Fundamentally, an American approach to digital assets is one that encourages innovation but mitigates the risks to consumers, investors, and businesses, broader financial stability and the environment,” the statement said. “We are clear-eyed that ‘financial innovation’ of the past has too often not benefited working families, while exacerbating inequality and increasing systemic financial risk. This history underscores the need to build robust consumer and economic protections into digital asset development.”