![]() Illicit finance and national security risks – misuse of digital assets may present illicit finance risks, including money laundering, cybercrime and ransomware, narcotics and human trafficking, and terrorism and proliferation financing. The novel and unique uses and functions of digital assets may create additional economic and financial risks that need to be addressed. Systemic risk – digital asset trading platforms and service providers may fall outside the existing scope of regulations and supervision. The Digital Asset Executive Order identifies six key risks relating to digital assets:įinancial risks – without sufficient oversight and standards, there is a risk of inadequate protections for sensitive financial data, custodial and other arrangements relating to customer assets and funds, and insufficient disclosure of the risks of investing in digital assets. Instead, it set out a series of policy statements and calls for a series of reports to be produced by the U.S. efforts to address uneven digital asset regulation, supervision and compliance, it does not itself introduce a new regulatory framework for digital assets. ![]() However, while the Digital Asset Executive Order represents a major step in U.S. a competitive advantage over other countries in the development of cryptocurrencies. ![]() The Executive Order also emphasises the need to reinforce U.S. and global financial stability and mitigate systemic risk, illicit finance and the national security risks posed by the misuse of digital assets. consumers, investors and businesses, safeguard U.S. administration has stated that it sees a need to develop a framework regulating digital asset use to protect U.S. Administration’s Cryptocurrency Policy Objectives financial leadership and competitive advantage responsible innovation and financial efficiency and inclusion.Ĭurrent U.S. The Executive Order is wide-reaching ordering action in six principal areas: consumer and investor protection financial stability financial crime U.S. Otherwise, the executive order seeks to foster responsible financial innovation by focusing on equal access to safe and affordable financial services, reduced fund transfer and payment costs, consumer protection and climate change issues and countering the use of cryptocurrencies in financial crime. central bank digital currency ( CBDC), and its potential design and deployment options. The Executive Order also orders urgent research into the benefits and risks of a digital U.S. federal agencies to adopt a unified approach to digital asset regulation and consult their international counterparts in a bid to achieve international collaboration on appropriate development and regulation of digital assets. cryptocurrency landscape by ordering the various U.S. ![]() With ever increasing innovation in digital assets and the rise in interest in and ownership of the new asset class, the Executive Order marks a watershed moment for the U.S. President Joseph R Biden Jr issued an Executive Order on Ensuring Responsible Development of Digital Assets 1 (the Digital Asset Executive Order) initiating a comprehensive approach to cryptocurrency regulation and oversight aimed at striking the right balance between the opportunities and risks cryptocurrencies present. President Issues Executive Order on Digital Asset Regulation
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