This brief posting in Finextra points out the 15-page executive order issued by the White House yesterday around the topic of CBDCs and crypto assets in general. The EO covers a lot of ground that has already been trodden over by the Fed in testing efforts (continuing) and other statements and publications. This is the type of stuff that we would expect normally takes place in cabinet meetings, so it seems to be just a clarification and formalization of creating policy positions and notifying congress that it should be on the radar.
‘The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; US leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
In a statement, NEC director Brian Deese and National Security Advisor Jake Sullivan, says: “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.”’
In reading over the EO a couple of things can be surmised. The up-front timeframe of 180 days and scope for a report and framework from the Secretary of the Treasury is pretty much already covered within the Fed Board of Governors discussion paper released back in January. There are a couple of other things on the ‘to do’ list, including reports from the Secretary of Commerce (180 days) and the Attorney General (90 days) around competitiveness and international law enforcement. All these reports are to be coordinated with other cabinet members, so this is just meant to show that everyone is basically on the same page.
Another report is then due within one year of the submitted framework which will describe priority actions taken under the framework and its effectiveness. Not quite sure what that means, but could be legislative actions or recommendations. The EO also ‘encourages’ the Fed Chairman to continue what they are already doing, so perhaps just putting the Fed on notice that someone is finally paying attention to this. Net net, we won’t be seeing an e-dollar for another while, which we already knew, but maybe this accelerates something.
‘The Order also places “urgency” on research and development of a potential United States CBDC. It directs the Government to assess the technological infrastructure and capacity needs for a potential US CBDC and encourages the Federal Reserve to continue its research, development, and assessment efforts, including development of a plan for broader US Government action in support of their work.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group