Updates Regarding US Digital Asset Policy

January 23, 2025

These significant changes in US policy apply to digital assets and financial technology, emphasizing support for blockchain innovation, while also introducing the prohibition of creating Central Bank Digital Currencies (CBDCs).

Key Points:

• Support for Digital Assets: The Executive Order underscores the importance of digital assets in U.S. innovation and economic development, advocating for the responsible growth and use of digital assets and blockchain technology across all sectors.

• Protection of Blockchain Activities: It emphasizes safeguarding individuals' and private entities' rights to access and utilize open public blockchain networks for lawful purposes, including software development, mining, validating, transacting without unlawful censorship, and self-custody of digital assets.

• Prohibition of CBDCs: It prohibits the establishment, issuance, circulation, or use of Central Bank Digital Currencies within the United States, citing concerns over financial stability, individual privacy, and national sovereignty.

Implications:

• Financial Sector: Banks and financial institutions will be expected to revise their policies to align with the administration’s stance on digital assets and blockchain applications. Regulatory clarity is expected to attract institutional players to digital assets.

• Payments for Businesses and Consumers: Businesses and consumers may see increased options for stablecoins across payments, remittances, and commerce.

• Innovation Opportunities: Blockchain developers and digital asset companies may benefit from greater legal protections, fostering innovation in decentralized finance (DeFi), tokenization, and digital payment infrastructure, including creating new opportunities for businesses involved in cross-border transactions.

Further Actions:

• Policy Review: Financial institutions, fintech companies, and crypto service providers should conduct a comprehensive review of their policies on digital assets, stablecoins, and blockchain activities.

• Financial Sector: Organizations involved in digital finance should develop forward-looking strategies to capitalize on the federal support for blockchain technology and stablecoins.

• Small Businesses: Small and medium-sized enterprises (SMEs) that rely on digital payment solutions may want to evaluate opportunities to integrate stablecoin transactions into options for customers.

Frequently Asked Questions (FAQ)

1. Which industries or sectors are most affected by this policy?

   Industries involved in digital assets, blockchain technology, and financial services are most affected, including fintech companies, cryptocurrency exchanges, and blockchain developers.

2. Does this policy override previous regulations?

   Yes, it revokes Executive Order 14067 of March 9, 2022, and directs the rescission of the Treasury's "Framework for International Engagement on Digital Assets" from July 7, 2022.

3. Where can I find official guidance or templates for compliance?

   Official guidance will likely be issued by the President’s Working Group on Digital Asset Markets and relevant regulatory agencies. Monitoring announcements from the White House and the National Economic Council is advisable.