U.S. lawmakers across the political aisle are praising President Joe Biden’s executive order on digital assets.
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 the order as “the first-ever whole-of-government approach” to digital assets, noting that it also focuses on climate and national security concerns.
Both Democrat and Republican lawmakers have praised the effort.
Sen. 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 long-standing 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.”
Sen. Sherrod Brown (D-Ohio), chairman of the banking committee, 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," Brown added. "I look forward to working with the administration and my colleagues in Congress to protect consumers, expand financial inclusion and safeguard our national security."
Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, 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.
“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," she said, noting also that her committee has already held a number of hearings on digital assets.
Rep. Patrick McHenry (R-N.C.), the ranking member on the House committee, echoed Toomey’s comments on Congress’ role in regulating digital assets. He called for bipartisan policies, saying 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,” McHenry said.
He also pushed back against claims that crypto might be used by the Russian government or oligarchs to evade sanctions.
Sen. Elizabeth Warren (D-Mass.), a member of the Senate Banking Committee, has called on the Treasury Department to clarify how it will prevent crypto from being used as a tool to evade sanctions. 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 Chairman Rostin Behnam, who has lobbied Congress to give his agency crypto spot market oversight authority, said the order will “ensure greater cooperation” among 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 Chairman Gary Gensler tweeted a more restrained statement, merely saying he looked forward to working with his colleagues to address some of the concerns posed by the growth of the digital asset sector.
Rohit Chopra, director of the Consumer Financial Protection Bureau, said his agency “is committed” to lowering the risks that digital assets may pose and protecting individuals from theft and fraud.
The Department of Homeland Security tweeted that Biden's executive order will “further our work to enable financial innovation” while lowering risks, and he said that the Secret Service – which operates under Homeland Security’s auspices – leads the department in those efforts.
U.S. Secretary of Commerce Gina Raimondo said in a statement that the order will “promote American leadership” in the field. She 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 didn't 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 Adviser Jake Sullivan, the White House said the directive intensifies the U.S.' efforts to oversee the crypto sector.
“Fundamentally, an American approach to digital assets is one that encourages innovation but mitigates the risks to consumers, investor 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.”
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