On Wednesday, March 9, the Biden Administration released its much anticipated Executive Order (EO) on Ensuring Responsible Development of Digital Assets.
The EO sets out a national strategy to promote digital asset innovation while protecting against the risks associated with digital assets. The strategy focuses on 6 issue areas:
- consumer and investor protection;
- financial stability;
- illicit finance;
- U.S. leadership in the global financial system and economic competitiveness;
- financial inclusion; and
- responsible innovation.
The EO tasks two senior White House officials – Jake Sullivan, United States National Security Advisor, and Brian Deese, Director of the National Economic Council of the United States – with interagency coordination with respect to the above topics.
The EO also highlights the importance of a potential US CBDC and calls for additional research and reports to determine whether the United States should issue one. It also calls for an increased focus on the climate impacts of proof-of-work consensus, among others.
With respect to U.S. leadership in the global financial system, the EO promotes the United States’ role in pushing for higher standards internationally to guard against illicit financing and calls for the U.S. to take an active role in global interagency coordination.
The EO tasks various agencies, including the Treasury Department, the prudential banking regulators (FRB, OCC, and FDIC), the financial market regulators (SEC and CFTC), and the consumer protection regulators (CFPB and FTC), among others, to study aspects of the digital asset industry and report on their findings.
The United States has taken significant measures in response to Russia’s further invasion of Ukraine. Highlights of these measures are below.
- The Financial Crimes Enforcement Network (FinCEN) issued a FinCEN Alert to financial institutions, highlighting the potential for attempts to evade expansive sanctions and other measures implemented in connection with the Russian Federation’s ongoing, unprovoked invasion of Ukraine. The alert provides example red flags to assist in identifying suspected sanctions evasion activity.
- President Biden signed an Executive Order to ban the import of Russian oil, liquefied natural gas, and coal to the United States – a significant action with widespread bipartisan support that will further deprive President Putin of the economic resources he uses to continue the attack on Ukraine.
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The U.S. Department of the Treasury announced that the Financial Literacy and Education Commission (FLEC), which coordinates the federal government’s financial education efforts, would form a new subgroup on digital asset financial education, would form a new subgroup on digital asset financial education, which will operate alongside the FLEC’s current workstream analyzing the impact of climate change on household and community financial resilience. Through this group, the FLEC will work to develop consumer-friendly, trustworthy and consistent educational materials, tools and outreach to help consumers make informed choices about digital assets.
House Financial Services Committee Ranking Member Patrick McHenry (R-NC), said in an interview that he plans to propose stablecoin legislation. The Biden administration has called for stablecoins to register as banks, but McHenry said that he sees bipartisan opposition to the idea.
House Financial Services Chair Maxine Waters (D-CA) announced the victories that the Committee successfully secured in the 2022 omnibus spending bill — legislation that provides Congress with the legal authority needed to spend or obligate U.S. Treasury funds. The legislation includes several priorities of Democratic members of the Financial Services Committee that Congresswoman Waters championed as Chairwoman of the Committee, including Division U, the Adjustable Interest Rate (LIBOR) Act, Division T, the Credit Union Governance Modernization Act, Title III of Division HH, the CARES Act Testimony, and Title I of Division O, Flood Insurance.
Acting Comptroller Michael J. Hsu spoke about crypto literacy in a speech at the Financial Literacy and Education Commission’s Public Meeting.
The Securities and Exchange Commission proposed amendments to its rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies. The proposed amendments would require, among other things, current reporting about material cybersecurity incidents and periodic reporting to provide updates about previously reported cybersecurity incidents.
The Joint Economic Committee Democrats said in a tweet that “Congress must act cautiously and deliberately when considering crypto legislation to clearly delineate regulatory responsibilities and ensure that digital assets can’t avoid scrutiny.
The Biden Administration is asking crypto exchanges to help ensure that Russian individuals and organizations aren’t using cryptocurrencies to avoid sanctions levied on them by Washington. The White House’s National Security Council and the Treasury Department have sought help from operators of some of the largest trading platforms to thwart any attempts to sidestep the stiff restrictions levied by the U.S. and its allies.
The United States took significant measures in response to Russia’s further invasion of Ukraine, including:
The leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States issued a joint statement condemning President Putin’s “war of choice” and attacks on Ukraine and imposing further restrictive economic measures on Russia. Specifically, the leaders committed to:
Ensuring that certain Russian banks are excluded from the SWIFT system, imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of the sanctions;
Taking measures to limit the sale of citizenship—so called golden passports—that let wealthy Russians connected to the Russian government become citizens of their countries and gain access to their financial systems;
Launching a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions;
Stepping up their coordination against disinformation and other forms of hybrid warfare.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State sanctioned numerous Russian elites and their family members, identifying certain property of these persons as blocked, and sanctioning Russian intelligence-directed disinformation outlets.