Summary of Comprehensive Framework for Responsible Development of Digital Assets

On September 16, 2022, the Biden Administration released a policy framework for the responsible development of digital assets. In essence, the framework presents a strategy to guide the direction of cryptocurrency regulation in the U.S. The Administration’s action is timely– the digital assets market is rapidly growing and has a market capitalization in the trillions. But, crypto markets face a great deal of instability; beyond scams and theft, the White House cites a May 2022 market crash that resulted in a loss of over $600 billion of investor and consumer funds.


The new digital assets framework stems from the Biden Administration’s March 9, 2022 Executive Order, “Ensuring Responsible Development of Digital Assets.” EO 14067 called on various government agencies and stakeholders to conduct a risk-benefit analysis of digital asset technology. The EO described six key priorities: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. This call to action resulted in nine research reports from a diverse group of stakeholders, including the Department of Treasury, Department of Commerce, Department of Justice, and the White House Office of Science and Technology Policy. The strategic input from these agencies has been used by the Biden Administration to develop the policy framework for the future of crypto regulation.


The new framework, as described in the Official White House Press Release, adds action items to further the priorities originally presented in the EO. Some highlights include:


Protecting Consumers, Investors, and Businesses

Studies indicate that noncompliance with applicable law and regulation is widespread in the crypto space. Fraud, scams, and theft are of significant concern to the President. The framework calls on the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to aggressively pursue investigations and enforcement actions. It also calls on the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) to crack down on unfair, deceptive, or abusive practices.


Promoting Access to Safe, Affordable Financial Services

Roughly 7 million Americans have no bank access. Additionally, traditional financial infrastructure, especially when making cross-border payments, is slow and inefficient. To combat this, the Federal Reserve is launching “FedNow,” to help financial institutions implement efficient instant payment services. The Administration also invites more research in this space to accomplish related goals like aligning global payment practices and ensuring equitable digital asset ecosystems.


Fostering Financial Stability

The Administration seeks to address instability in the crypto markets. It calls on the Treasury to work with other financial institutions to better identify and mitigate potential cyber security vulnerabilities. Agencies must collaborate to “identify, track and analyze” emerging risks. Furthermore, in October 2022, the Financial Stability Oversight Council (FSOC) will publish its official stability risk assessment and may make additional recommendations to the White House.


Advancing Responsible Innovation

In an effort to foster digital asset innovation, the Department of Commerce will consider establishing a “standing forum” with various stakeholders to exchange knowledge on the topic. Additionally, the Treasury and other financial regulators will make guidance available to innovative companies who wish to implement digital asset technology. The framework also proposes various other research projects, such as better understanding the environmental impacts of powering crypto-assets.


Reinforcing Our Global Financial Leadership and Competitiveness

To bolster U.S. financial leadership globally, the White House asks relevant agencies to take on greater leadership roles on digital asset projects within international organizations and standard-setting bodies. The Department of Justice and others should partner with agencies in foreign countries to promote information sharing. Additionally, the Department of Commerce will help U.S. fintech and digital asset firms establish themselves in the global crypto economy.


Fighting Illicit Finance

To prevent cybercriminals from laundering illicit assets to fund terrorism and crime, the President will consider asking the legislative branch to amend the Bank Secrecy Act (BSA) to apply to digital assets explicitly. Additionally, he may ask Congress to amend various federal statutes to give the DOJ greater jurisdiction to prosecute digital asset crimes. The White House urges various agencies to ramp up enforcement against such cybercriminals. Moreover, by the end of 2023, the Treasury will complete various risk assessment reports related to illicit finance in the digital asset space.


Exploring a U.S. Central Bank Digital Currency (CBDC)

Finally, the Biden Administration seeks to explore a digital form of the U.S. dollar. It recognizes the benefits to consumer protection, economic growth, financial inclusion, and national security, among other things. It calls for the Treasury to lead a working group with the Federal Reserve, the National Economic Council, the National Security Council, and the Office of Science and Technology Policy to continue relevant research, experimentation, and evaluation.


–Anna Fucillo, Law Clerk

Boston College Law School ’24




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