Today the White House announced the “First-Ever Comprehensive Framework for Responsible Development of Digital Assets“. At the same time, the Treasury released three papers to comply with President Biden’s Executive Order from six months ago. While there’s nothing wrong with any of the documents, the papers and framework are still somewhat vague rather than providing definitive direction. Hence one expects there will be more of the same, with greater urgency around a digital dollar.
The White House Framework announcement promises another report next month from the Financial Stability Oversight Council (FSOC), which addresses financial stability risks and identifies regulatory gaps. Perhaps that might provide more specific direction.
The framework firstly places the “highest urgency” on research for a digital dollar, including a cross agency working group. Secondly, it will “execute a comprehensive action plan to mitigate key risks of cryptocurrencies—among others, money laundering and financing for terrorism.” The third action point is consumer protection.
Regarding the Treasury publications, “The reports clearly identify the real challenges and risks of digital assets used for financial services,” said Treasury Secretary Janet Yellen. “At the same time, if these risks are mitigated, digital assets and other emerging technologies could offer significant opportunities.”
There are a few points from the digital dollar paper we will highlight in a later piece.