Ensuring Responsible Development of Digital Assets

CourtExecutive Office Of The President
Citation87 FR 14143
Published date14 March 2022
Record Number2022-05471
Federal Register, Volume 87 Issue 49 (Monday, March 14, 2022)
[Federal Register Volume 87, Number 49 (Monday, March 14, 2022)]
                [Presidential Documents]
                [Pages 14143-14152]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-05471] Presidential Documents
                Federal Register / Vol. 87, No. 49 / Monday, March 14, 2022 /
                Presidential Documents
                ___________________________________________________________________
                Title 3--
                The President
                [[Page 14143]]
                 Executive Order 14067 of March 9, 2022
                
                Ensuring Responsible Development of Digital
                 Assets
                 By the authority vested in me as President by the
                 Constitution and the laws of the United States of
                 America, it is hereby ordered as follows:
                 Section 1. Policy. Advances in digital and distributed
                 ledger technology for financial services have led to
                 dramatic growth in markets for digital assets, with
                 profound implications for the protection of consumers,
                 investors, and businesses, including data privacy and
                 security; financial stability and systemic risk; crime;
                 national security; the ability to exercise human
                 rights; financial inclusion and equity; and energy
                 demand and climate change. In November 2021, non-state
                 issued digital assets reached a combined market
                 capitalization of $3 trillion, up from approximately
                 $14 billion in early November 2016. Monetary
                 authorities globally are also exploring, and in some
                 cases introducing, central bank digital currencies
                 (CBDCs).
                 While many activities involving digital assets are
                 within the scope of existing domestic laws and
                 regulations, an area where the United States has been a
                 global leader, growing development and adoption of
                 digital assets and related innovations, as well as
                 inconsistent controls to defend against certain key
                 risks, necessitate an evolution and alignment of the
                 United States Government approach to digital assets.
                 The United States has an interest in responsible
                 financial innovation, expanding access to safe and
                 affordable financial services, and reducing the cost of
                 domestic and cross-border funds transfers and payments,
                 including through the continued modernization of public
                 payment systems. We must take strong steps to reduce
                 the risks that digital assets could pose to consumers,
                 investors, and business protections; financial
                 stability and financial system integrity; combating and
                 preventing crime and illicit finance; national
                 security; the ability to exercise human rights;
                 financial inclusion and equity; and climate change and
                 pollution.
                 Sec. 2. Objectives. The principal policy objectives of
                 the United States with respect to digital assets are as
                 follows:
                 (a) We must protect consumers, investors, and
                 businesses in the United States. The unique and varied
                 features of digital assets can pose significant
                 financial risks to consumers, investors, and businesses
                 if appropriate protections are not in place. In the
                 absence of sufficient oversight and standards, firms
                 providing digital asset services may provide inadequate
                 protections for sensitive financial data, custodial and
                 other arrangements relating to customer assets and
                 funds, or disclosures of risks associated with
                 investment. Cybersecurity and market failures at major
                 digital asset exchanges and trading platforms have
                 resulted in billions of dollars in losses. The United
                 States should ensure that safeguards are in place and
                 promote the responsible development of digital assets
                 to protect consumers, investors, and businesses;
                 maintain privacy; and shield against arbitrary or
                 unlawful surveillance, which can contribute to human
                 rights abuses.
                 (b) We must protect United States and global
                 financial stability and mitigate systemic risk. Some
                 digital asset trading platforms and service providers
                 have grown rapidly in size and complexity and may not
                 be subject to or in compliance with appropriate
                 regulations or supervision. Digital asset issuers,
                 exchanges and trading platforms, and intermediaries
                 whose activities may increase risks to financial
                 stability, should, as appropriate, be subject to and in
                 compliance with regulatory and supervisory standards
                 that govern traditional market infrastructures and
                 financial firms, in line with the general
                [[Page 14144]]
                 principle of ``same business, same risks, same rules.''
                 The new and unique uses and functions that digital
                 assets can facilitate may create additional economic
                 and financial risks requiring an evolution to a
                 regulatory approach that adequately addresses those
                 risks.
                 (c) We must mitigate the illicit finance and
                 national security risks posed by misuse of digital
                 assets. Digital assets may pose significant illicit
                 finance risks, including money laundering, cybercrime
                 and ransomware, narcotics and human trafficking, and
                 terrorism and proliferation financing. Digital assets
                 may also be used as a tool to circumvent United States
                 and foreign financial sanctions regimes and other tools
                 and authorities. Further, while the United States has
                 been a leader in setting international standards for
                 the regulation and supervision of digital assets for
                 anti-money laundering and countering the financing of
                 terrorism (AML/CFT), poor or nonexistent implementation
                 of those standards in some jurisdictions abroad can
                 present significant illicit financing risks for the
                 United States and global financial systems. Illicit
                 actors, including the perpetrators of ransomware
                 incidents and other cybercrime, often launder and cash
                 out of their illicit proceeds using digital asset
                 service providers in jurisdictions that have not yet
                 effectively implemented the international standards set
                 by the inter-governmental Financial Action Task Force
                 (FATF). The continued availability of service providers
                 in jurisdictions where international AML/CFT standards
                 are not effectively implemented enables financial
                 activity without illicit finance controls. Growth in
                 decentralized financial ecosystems, peer-to-peer
                 payment activity, and obscured blockchain ledgers
                 without controls to mitigate illicit finance could also
                 present additional market and national security risks
                 in the future. The United States must ensure
                 appropriate controls and accountability for current and
                 future digital assets systems to promote high standards
                 for transparency, privacy, and security--including
                 through regulatory, governance, and technological
                 measures--that counter illicit activities and preserve
                 or enhance the efficacy of our national security tools.
                 When digital assets are abused or used in illicit ways,
                 or undermine national security, it is in the national
                 interest to take actions to mitigate these illicit
                 finance and national security risks through regulation,
                 oversight, law enforcement action, or use of other
                 United States Government authorities.
                 (d) We must reinforce United States leadership in
                 the global financial system and in technological and
                 economic competitiveness, including through the
                 responsible development of payment innovations and
                 digital assets. The United States has an interest in
                 ensuring that it remains at the forefront of
                 responsible development and design of digital assets
                 and the technology that underpins new forms of payments
                 and capital flows in the international financial
                 system, particularly in setting standards that promote:
                 democratic values; the rule of law; privacy; the
                 protection of consumers, investors, and businesses; and
                 interoperability with digital platforms, legacy
                 architecture, and international payment systems. The
                 United States derives significant economic and national
                 security benefits from the central role that the United
                 States dollar and United States financial institutions
                 and markets play in the global financial system.
                 Continued United States leadership in the global
                 financial system will sustain United States financial
                 power and promote United States economic interests.
                 (e) We must promote access to safe and affordable
                 financial services. Many Americans are underbanked and
                 the costs of cross-border money transfers and payments
                 are high. The United States has a strong interest in
                 promoting responsible innovation that expands equitable
                 access to financial services, particularly for those
                 Americans underserved by the traditional banking
                 system, including by making investments and domestic
                 and cross-border funds transfers and payments cheaper,
                 faster, and safer, and by promoting greater and more
                 cost-efficient access to financial products and
                 services. The United States also has an interest in
                 ensuring that the benefits of financial innovation are
                 enjoyed equitably by all Americans and that any
                 disparate impacts of financial innovation are
                 mitigated.
                [[Page 14145]]
                 (f) We must support technological advances that
                 promote responsible development and use of digital
                 assets. The technological architecture of different
                 digital assets has substantial implications for
                 privacy, national security, the operational security
                 and resilience of financial systems, climate change,
                 the ability to exercise human rights, and other
                 national goals. The United States has an interest in
                 ensuring that digital asset technologies and the
                 digital payments ecosystem are developed, designed, and
                 implemented in a responsible manner that includes
                 privacy and security in their architecture, integrates
                 features and controls that defend against illicit
                 exploitation, and reduces negative climate impacts and
                 environmental pollution, as may result from some
                 cryptocurrency mining.
                 Sec. 3. Coordination. The Assistant to the President
                 for National Security Affairs (APNSA) and the Assistant
                 to the President for Economic Policy (APEP) shall
                 coordinate, through the interagency process described
                 in National Security Memorandum 2 of February 4, 2021
                 (Renewing the National Security Council System), the
                 executive branch actions necessary to implement this
                 order. The interagency process shall include, as
                 appropriate: the Secretary of State, the Secretary of
                 the Treasury, the Secretary of Defense, the Attorney
                 General, the Secretary of Commerce, the Secretary of
                 Labor, the Secretary of Energy, the Secretary of
                 Homeland Security, the Administrator of the
                 Environmental Protection Agency, the Director of the
                 Office of Management and Budget, the Director of
                 National Intelligence, the Director of the Domestic
                 Policy Council, the Chair of the Council of Economic
                 Advisers, the Director of the Office of Science and
                 Technology Policy, the Administrator of the Office of
                 Information and Regulatory Affairs, the Director of the
                 National Science Foundation, and the Administrator of
                 the United States Agency for International Development.
                 Representatives of other executive departments and
                 agencies (agencies) and other senior officials may be
                 invited to attend interagency meetings as appropriate,
                 including, with due respect for their regulatory
                 independence, representatives of the Board of Governors
                 of the Federal Reserve System, the Consumer Financial
                 Protection Bureau (CFPB), the Federal Trade Commission
                 (FTC), the Securities and Exchange Commission (SEC),
                 the Commodity Futures Trading Commission (CFTC), the
                 Federal Deposit Insurance Corporation, the Office of
                 the Comptroller of the Currency, and other Federal
                 regulatory agencies.
                 Sec. 4. Policy and Actions Related to United States
                 Central Bank Digital Currencies. (a) The policy of my
                 Administration on a United States CBDC is as follows:
                (i) Sovereign money is at the core of a well-functioning financial system,
                macroeconomic stabilization policies, and economic growth. My
                Administration places the highest urgency on research and development
                efforts into the potential design and deployment options of a United States
                CBDC. These efforts should include assessments of possible benefits and
                risks for consumers, investors, and businesses; financial stability and
                systemic risk; payment systems; national security; the ability to exercise
                human rights; financial inclusion and equity; and the actions required to
                launch a United States CBDC if doing so is deemed to be in the national
                interest.
                (ii) My Administration sees merit in showcasing United States leadership
                and participation in international fora related to CBDCs and in multi-
                country conversations and pilot projects involving CBDCs. Any future dollar
                payment system should be designed in a way that is consistent with United
                States priorities (as outlined in section 4(a)(i) of this order) and
                democratic values, including privacy protections, and that ensures the
                global financial system has appropriate transparency, connectivity, and
                platform and architecture interoperability or transferability, as
                appropriate.
                (iii) A United States CBDC may have the potential to support efficient and
                low-cost transactions, particularly for cross-border funds transfers and
                payments, and to foster greater access to the financial system, with fewer
                of the risks posed by private sector-administered digital assets. A United
                States CBDC that is interoperable with CBDCs issued by other monetary
                [[Page 14146]]
                authorities could facilitate faster and lower-cost cross-border payments
                and potentially boost economic growth, support the continued centrality of
                the United States within the international financial system, and help to
                protect the unique role that the dollar plays in global finance. There are
                also, however, potential risks and downsides to consider. We should
                prioritize timely assessments of potential benefits and risks under various
                designs to ensure that the United States remains a leader in the
                international financial system.
                 (b) Within 180 days of the date of this order, the
                 Secretary of the Treasury, in consultation with the
                 Secretary of State, the Attorney General, the Secretary
                 of Commerce, the Secretary of Homeland Security, the
                 Director of the Office of Management and Budget, the
                 Director of National Intelligence, and the heads of
                 other relevant agencies, shall submit to the President
                 a report on the future of money and payment systems,
                 including the conditions that drive broad adoption of
                 digital assets; the extent to which technological
                 innovation may influence these outcomes; and the
                 implications for the United States financial system,
                 the modernization of and changes to payment systems,
                 economic growth, financial inclusion, and national
                 security. This report shall be coordinated through the
                 interagency process described in section 3 of this
                 order. Based on the potential United States CBDC design
                 options, this report shall include an analysis of:
                (i) the potential implications of a United States CBDC, based on the
                possible design choices, for national interests, including implications for
                economic growth and stability;
                (ii) the potential implications a United States CBDC might have on
                financial inclusion;
                (iii) the potential relationship between a CBDC and private sector-
                administered digital assets;
                (iv) the future of sovereign and privately produced money globally and
                implications for our financial system and democracy;
                (v) the extent to which foreign CBDCs could displace existing currencies
                and alter the payment system in ways that could undermine United States
                financial centrality;
                (vi) the potential implications for national security and financial crime,
                including an analysis of illicit financing risks, sanctions risks, other
                law enforcement and national security interests, and implications for human
                rights; and
                (vii) an assessment of the effects that the growth of foreign CBDCs may
                have on United States interests generally.
                 (c) The Chairman of the Board of Governors of the
                 Federal Reserve System (Chairman of the Federal
                 Reserve) is encouraged to continue to research and
                 report on the extent to which CBDCs could improve the
                 efficiency and reduce the costs of existing and future
                 payments systems, to continue to assess the optimal
                 form of a United States CBDC, and to develop a
                 strategic plan for Federal Reserve and broader United
                 States Government action, as appropriate, that
                 evaluates the necessary steps and requirements for the
                 potential implementation and launch of a United States
                 CBDC. The Chairman of the Federal Reserve is also
                 encouraged to evaluate the extent to which a United
                 States CBDC, based on the potential design options,
                 could enhance or impede the ability of monetary policy
                 to function effectively as a critical macroeconomic
                 stabilization tool.
                 (d) The Attorney General, in consultation with the
                 Secretary of the Treasury and the Chairman of the
                 Federal Reserve, shall:
                (i) within 180 days of the date of this order, provide to the President
                through the APNSA and APEP an assessment of whether legislative changes
                would be necessary to issue a United States CBDC, should it be deemed
                appropriate and in the national interest; and
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                (ii) within 210 days of the date of this order, provide to the President
                through the APNSA and the APEP a corresponding legislative proposal, based
                on consideration of the report submitted by the Secretary of the Treasury
                under section 4(b) of this order and any materials developed by the
                Chairman of the Federal Reserve consistent with section 4(c) of this order.
                 Sec. 5. Measures to Protect Consumers, Investors, and
                 Businesses. (a) The increased use of digital assets and
                 digital asset exchanges and trading platforms may
                 increase the risks of crimes such as fraud and theft,
                 other statutory and regulatory violations, privacy and
                 data breaches, unfair and abusive acts or practices,
                 and other cyber incidents faced by consumers,
                 investors, and businesses. The rise in use of digital
                 assets, and differences across communities, may also
                 present disparate financial risk to less informed
                 market participants or exacerbate inequities. It is
                 critical to ensure that digital assets do not pose
                 undue risks to consumers, investors, or businesses, and
                 to put in place protections as a part of efforts to
                 expand access to safe and affordable financial
                 services.
                 (b) Consistent with the goals stated in section
                 5(a) of this order:
                (i) Within 180 days of the date of this order, the Secretary of the
                Treasury, in consultation with the Secretary of Labor and the heads of
                other relevant agencies, including, as appropriate, the heads of
                independent regulatory agencies such as the FTC, the SEC, the CFTC, Federal
                banking agencies, and the CFPB, shall submit to the President a report, or
                section of the report required by section 4 of this order, on the
                implications of developments and adoption of digital assets and changes in
                financial market and payment system infrastructures for United States
                consumers, investors, businesses, and for equitable economic growth. One
                section of the report shall address the conditions that would drive mass
                adoption of different types of digital assets and the risks and
                opportunities such growth might present to United States consumers,
                investors, and businesses, including a focus on how technological
                innovation may impact these efforts and with an eye toward those most
                vulnerable to disparate impacts. The report shall also include policy
                recommendations, including potential regulatory and legislative actions, as
                appropriate, to protect United States consumers, investors, and businesses,
                and support expanding access to safe and affordable financial services. The
                report shall be coordinated through the interagency process described in
                section 3 of this order.
                (ii) Within 180 days of the date of this order, the Director of the Office
                of Science and Technology Policy and the Chief Technology Officer of the
                United States, in consultation with the Secretary of the Treasury, the
                Chairman of the Federal Reserve, and the heads of other relevant agencies,
                shall submit to the President a technical evaluation of the technological
                infrastructure, capacity, and expertise that would be necessary at relevant
                agencies to facilitate and support the introduction of a CBDC system should
                one be proposed. The evaluation should specifically address the technical
                risks of the various designs, including with respect to emerging and future
                technological developments, such as quantum computing. The evaluation
                should also include any reflections or recommendations on how the inclusion
                of digital assets in Federal processes may affect the work of the United
                States Government and the provision of Government services, including risks
                and benefits to cybersecurity, customer experience, and social-safety-net
                programs. The evaluation shall be coordinated through the interagency
                process described in section 3 of this order.
                (iii) Within 180 days of the date of this order, the Attorney General, in
                consultation with the Secretary of the Treasury and the Secretary of
                Homeland Security, shall submit to the President a report on the role of
                law enforcement agencies in detecting, investigating, and prosecuting
                criminal activity related to digital assets. The report shall include any
                recommendations on regulatory or legislative actions, as appropriate.
                [[Page 14148]]
                (iv) The Attorney General, the Chair of the FTC, and the Director of the
                CFPB are each encouraged to consider what, if any, effects the growth of
                digital assets could have on competition policy.
                (v) The Chair of the FTC and the Director of the CFPB are each encouraged
                to consider the extent to which privacy or consumer protection measures
                within their respective jurisdictions may be used to protect users of
                digital assets and whether additional measures may be needed.
                (vi) The Chair of the SEC, the Chairman of the CFTC, the Chairman of the
                Federal Reserve, the Chairperson of the Board of Directors of the Federal
                Deposit Insurance Corporation, and the Comptroller of the Currency are each
                encouraged to consider the extent to which investor and market protection
                measures within their respective jurisdictions may be used to address the
                risks of digital assets and whether additional measures may be needed.
                (vii) Within 180 days of the date of this order, the Director of the Office
                of Science and Technology Policy, in consultation with the Secretary of the
                Treasury, the Secretary of Energy, the Administrator of the Environmental
                Protection Agency, the Chair of the Council of Economic Advisers, the
                Assistant to the President and National Climate Advisor, and the heads of
                other relevant agencies, shall submit a report to the President on the
                connections between distributed ledger technology and short-, medium-, and
                long-term economic and energy transitions; the potential for these
                technologies to impede or advance efforts to tackle climate change at home
                and abroad; and the impacts these technologies have on the environment.
                This report shall be coordinated through the interagency process described
                in section 3 of this order. The report should also address the effect of
                cryptocurrencies' consensus mechanisms on energy usage, including research
                into potential mitigating measures and alternative mechanisms of consensus
                and the design tradeoffs those may entail. The report should specifically
                address:
                 (A) potential uses of blockchain that could support monitoring or
                mitigating technologies to climate impacts, such as exchanging of
                liabilities for greenhouse gas emissions, water, and other natural or
                environmental assets; and
                 (B) implications for energy policy, including as it relates to grid
                management and reliability, energy efficiency incentives and standards, and
                sources of energy supply.
                (viii) Within 1 year of submission of the report described in section
                5(b)(vii) of this order, the Director of the Office of Science and
                Technology Policy, in consultation with the Secretary of the Treasury, the
                Secretary of Energy, the Administrator of the Environmental Protection
                Agency, the Chair of the Council of Economic Advisers, and the heads of
                other relevant agencies, shall update the report described in section
                5(b)(vii) of this order, including to address any knowledge gaps identified
                in such report.
                 Sec. 6. Actions to Promote Financial Stability,
                 Mitigate Systemic Risk, and Strengthen Market
                 Integrity. (a) Financial regulators--including the SEC,
                 the CFTC, and the CFPB and Federal banking agencies--
                 play critical roles in establishing and overseeing
                 protections across the financial system that safeguard
                 its integrity and promote its stability. Since 2017,
                 the Secretary of the Treasury has convened the
                 Financial Stability Oversight Council (FSOC) to assess
                 the financial stability risks and regulatory gaps posed
                 by the ongoing adoption of digital assets. The United
                 States must assess and take steps to address risks that
                 digital assets pose to financial stability and
                 financial market integrity.
                 (b) Within 210 days of the date of this order, the
                 Secretary of the Treasury should convene the FSOC and
                 produce a report outlining the specific financial
                 stability risks and regulatory gaps posed by various
                 types of digital assets and providing recommendations
                 to address such risks. As the Secretary
                [[Page 14149]]
                 of the Treasury and the FSOC deem appropriate, the
                 report should consider the particular features of
                 various types of digital assets and include
                 recommendations that address the identified financial
                 stability risks posed by these digital assets,
                 including any proposals for additional or adjusted
                 regulation and supervision as well as for new
                 legislation. The report should take account of the
                 prior analyses and assessments of the FSOC, agencies,
                 and the President's Working Group on Financial Markets,
                 including the ongoing work of the Federal banking
                 agencies, as appropriate.
                 Sec. 7. Actions to Limit Illicit Finance and Associated
                 National Security Risks. (a) Digital assets have
                 facilitated sophisticated cybercrime-related financial
                 networks and activity, including through ransomware
                 activity. The growing use of digital assets in
                 financial activity heightens risks of crimes such as
                 money laundering, terrorist and proliferation
                 financing, fraud and theft schemes, and corruption.
                 These illicit activities highlight the need for ongoing
                 scrutiny of the use of digital assets, the extent to
                 which technological innovation may impact such
                 activities, and exploration of opportunities to
                 mitigate these risks through regulation, supervision,
                 public-private engagement, oversight, and law
                 enforcement.
                 (b) Within 90 days of submission to the Congress of
                 the National Strategy for Combating Terrorist and Other
                 Illicit Financing, the Secretary of the Treasury, the
                 Secretary of State, the Attorney General, the Secretary
                 of Commerce, the Secretary of Homeland Security, the
                 Director of the Office of Management and Budget, the
                 Director of National Intelligence, and the heads of
                 other relevant agencies may each submit to the
                 President supplemental annexes, which may be classified
                 or unclassified, to the Strategy offering additional
                 views on illicit finance risks posed by digital assets,
                 including cryptocurrencies, stablecoins, CBDCs, and
                 trends in the use of digital assets by illicit actors.
                 (c) Within 120 days of submission to the Congress
                 of the National Strategy for Combating Terrorist and
                 Other Illicit Financing, the Secretary of the Treasury,
                 in consultation with the Secretary of State, the
                 Attorney General, the Secretary of Commerce, the
                 Secretary of Homeland Security, the Director of the
                 Office of Management and Budget, the Director of
                 National Intelligence, and the heads of other relevant
                 agencies shall develop a coordinated action plan based
                 on the Strategy's conclusions for mitigating the
                 digital-asset-related illicit finance and national
                 security risks addressed in the updated strategy. This
                 action plan shall be coordinated through the
                 interagency process described in section 3 of this
                 order. The action plan shall address the role of law
                 enforcement and measures to increase financial services
                 providers' compliance with AML/CFT obligations related
                 to digital asset activities.
                 (d) Within 120 days following completion of all of
                 the following reports--the National Money Laundering
                 Risk Assessment; the National Terrorist Financing Risk
                 Assessment; the National Proliferation Financing Risk
                 Assessment; and the updated National Strategy for
                 Combating Terrorist and Other Illicit Financing--the
                 Secretary of the Treasury shall notify the relevant
                 agencies through the interagency process described in
                 section 3 of this order on any pending, proposed, or
                 prospective rulemakings to address digital asset
                 illicit finance risks. The Secretary of the Treasury
                 shall consult with and consider the perspectives of
                 relevant agencies in evaluating opportunities to
                 mitigate such risks through regulation.
                 Sec. 8. Policy and Actions Related to Fostering
                 International Cooperation and United States
                 Competitiveness. (a) The policy of my Administration on
                 fostering international cooperation and United States
                 competitiveness with respect to digital assets and
                 financial innovation is as follows:
                (i) Technology-driven financial innovation is frequently cross-border and
                therefore requires international cooperation among public authorities. This
                cooperation is critical to maintaining high regulatory standards and a
                level playing field. Uneven regulation, supervision, and compliance across
                jurisdictions creates opportunities for arbitrage and raises risks to
                financial
                [[Page 14150]]
                stability and the protection of consumers, investors, businesses, and
                markets. Inadequate AML/CFT regulation, supervision, and enforcement by
                other countries challenges the ability of the United States to investigate
                illicit digital asset transaction flows that frequently jump overseas, as
                is often the case in ransomware payments and other cybercrime-related money
                laundering. There must also be cooperation to reduce inefficiencies in
                international funds transfer and payment systems.
                (ii) The United States Government has been active in international fora and
                through bilateral partnerships on many of these issues and has a robust
                agenda to continue this work in the coming years. While the United States
                held the position of President of the FATF, the United States led the group
                in developing and adopting the first international standards on digital
                assets. The United States must continue to work with international partners
                on standards for the development and appropriate interoperability of
                digital payment architectures and CBDCs to reduce payment inefficiencies
                and ensure that any new funds transfer and payment systems are consistent
                with United States values and legal requirements.
                (iii) While the United States held the position of President of the 2020
                G7, the United States established the G7 Digital Payments Experts Group to
                discuss CBDCs, stablecoins, and other digital payment issues. The G7 report
                outlining a set of policy principles for CBDCs is an important contribution
                to establishing guidelines for jurisdictions for the exploration and
                potential development of CBDCs. While a CBDC would be issued by a country's
                central bank, the supporting infrastructure could involve both public and
                private participants. The G7 report highlighted that any CBDC should be
                grounded in the G7's long-standing public commitments to transparency, the
                rule of law, and sound economic governance, as well as the promotion of
                competition and innovation.
                (iv) The United States continues to support the G20 roadmap for addressing
                challenges and frictions with cross-border funds transfers and payments for
                which work is underway, including work on improvements to existing systems
                for cross-border funds transfers and payments, the international dimensions
                of CBDC designs, and the potential of well-regulated stablecoin
                arrangements. The international Financial Stability Board (FSB), together
                with standard-setting bodies, is leading work on issues related to
                stablecoins, cross-border funds transfers and payments, and other
                international dimensions of digital assets and payments, while FATF
                continues its leadership in setting AML/CFT standards for digital assets.
                Such international work should continue to address the full spectrum of
                issues and challenges raised by digital assets, including financial
                stability, consumer, investor, and business risks, and money laundering,
                terrorist financing, proliferation financing, sanctions evasion, and other
                illicit activities.
                (v) My Administration will elevate the importance of these topics and
                expand engagement with our critical international partners, including
                through fora such as the G7, G20, FATF, and FSB. My Administration will
                support the ongoing international work and, where appropriate, push for
                additional work to drive development and implementation of holistic
                standards, cooperation and coordination, and information sharing. With
                respect to digital assets, my Administration will seek to ensure that our
                core democratic values are respected; consumers, investors, and businesses
                are protected; appropriate global financial system connectivity and
                platform and architecture interoperability are preserved; and the safety
                and soundness of the global financial system and international monetary
                system are maintained.
                 (b) In furtherance of the policy stated in section
                 8(a) of this order:
                (i) Within 120 days of the date of this order, the Secretary of the
                Treasury, in consultation with the Secretary of State, the Secretary of
                Commerce, the Administrator of the United States Agency for International
                Development, and the heads of other relevant agencies, shall establish a
                framework for interagency international engagement with foreign
                counterparts and
                [[Page 14151]]
                in international fora to, as appropriate, adapt, update, and enhance
                adoption of global principles and standards for how digital assets are used
                and transacted, and to promote development of digital asset and CBDC
                technologies consistent with our values and legal requirements. This
                framework shall be coordinated through the interagency process described in
                section 3 of this order. This framework shall include specific and
                prioritized lines of effort and coordinated messaging; interagency
                engagement and activities with foreign partners, such as foreign assistance
                and capacity-building efforts and coordination of global compliance; and
                whole-of-government efforts to promote international principles, standards,
                and best practices. This framework should reflect ongoing leadership by the
                Secretary of the Treasury and financial regulators in relevant
                international financial standards bodies, and should elevate United States
                engagement on digital assets issues in technical standards bodies and other
                international fora to promote development of digital asset and CBDC
                technologies consistent with our values.
                (ii) Within 1 year of the date of the establishment of the framework
                required by section 8(b)(i) of this order, the Secretary of the Treasury,
                in consultation with the Secretary of State, the Secretary of Commerce, the
                Director of the Office of Management and Budget, the Administrator of the
                United States Agency for International Development, and the heads of other
                relevant agencies as appropriate, shall submit a report to the President on
                priority actions taken under the framework and its effectiveness. This
                report shall be coordinated through the interagency process described in
                section 3 of this order.
                (iii) Within 180 days of the date of this order, the Secretary of Commerce,
                in consultation with the Secretary of State, the Secretary of the Treasury,
                and the heads of other relevant agencies, shall establish a framework for
                enhancing United States economic competitiveness in, and leveraging of,
                digital asset technologies. This framework shall be coordinated through the
                interagency process described in section 3 of this order.
                (iv) Within 90 days of the date of this order, the Attorney General, in
                consultation with the Secretary of State, the Secretary of the Treasury,
                and the Secretary of Homeland Security, shall submit a report to the
                President on how to strengthen international law enforcement cooperation
                for detecting, investigating, and prosecuting criminal activity related to
                digital assets.
                 Sec. 9. Definitions. For the purposes of this order:
                 (a) The term ``blockchain'' refers to distributed
                 ledger technologies where data is shared across a
                 network that creates a digital ledger of verified
                 transactions or information among network participants
                 and the data are typically linked using cryptography to
                 maintain the integrity of the ledger and execute other
                 functions, including transfer of ownership or value.
                 (b) The term ``central bank digital currency'' or
                 ``CBDC'' refers to a form of digital money or monetary
                 value, denominated in the national unit of account,
                 that is a direct liability of the central bank.
                 (c) The term ``cryptocurrencies'' refers to a
                 digital asset, which may be a medium of exchange, for
                 which generation or ownership records are supported
                 through a distributed ledger technology that relies on
                 cryptography, such as a blockchain.
                 (d) The term ``digital assets'' refers to all
                 CBDCs, regardless of the technology used, and to other
                 representations of value, financial assets and
                 instruments, or claims that are used to make payments
                 or investments, or to transmit or exchange funds or the
                 equivalent thereof, that are issued or represented in
                 digital form through the use of distributed ledger
                 technology. For example, digital assets include
                 cryptocurrencies, stablecoins, and CBDCs. Regardless of
                 the label used, a digital asset may be, among other
                 things, a security, a commodity, a derivative, or other
                 financial product.
                [[Page 14152]]
                 Digital assets may be exchanged across digital asset
                 trading platforms, including centralized and
                 decentralized finance platforms, or through peer-to-
                 peer technologies.
                 (e) The term ``stablecoins'' refers to a category
                 of cryptocurrencies with mechanisms that are aimed at
                 maintaining a stable value, such as by pegging the
                 value of the coin to a specific currency, asset, or
                 pool of assets or by algorithmically controlling supply
                 in response to changes in demand in order to stabilize
                 value.
                 Sec. 10. General Provisions. (a) Nothing in this order
                 shall be construed to impair or otherwise affect:
                (i) the authority granted by law to an executive department or agency, or
                the head thereof; or
                (ii) the functions of the Director of the Office of Management and Budget
                relating to budgetary, administrative, or legislative proposals.
                 (b) This order shall be implemented consistent with
                 applicable law and subject to the availability of
                 appropriations.
                 (c) This order is not intended to, and does not,
                 create any right or benefit, substantive or procedural,
                 enforceable at law or in equity by any party against
                 the United States, its departments, agencies, or
                 entities, its officers, employees, or agents, or any
                 other person.
                
                
                 (Presidential Sig.)
                 THE WHITE HOUSE,
                 March 9, 2022.
                [FR Doc. 2022-05471
                Filed 3-11-22; 8:45 am]
                Billing code 3395-F2-P
                

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