Digital assets, including cryptocurrencies, have seen explosive growth in recent years, surpassing a $3 trillion market cap last November and up from $14 billion just five years prior. Over 100 countries are exploring or piloting Central Bank Digital Currencies, a digital form of a country’s sovereign currency.
The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system, but also has substantial implications for consumer protection, financial stability, human rights, national security, and climate risk. The United States is determined to maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks. And it must play a leading role in the global governance of digital assets consistent with democratic values and U.S. global competitiveness.
This is why President Joe Biden has signed an Executive Order on “Ensuring Responsible Development of Digital Assets.” The executive order outlines the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology. The Executive Order lays out a national policy for digital assets across six key objectives: consumer, investor, and business protection; financial stability; illicit finance; U.S. in the global financial system and economic development; financial inclusion; and responsible innovation.
Secretary of State Antony Blinken said, “democracies have to pass the tech test together. And diplomacy, I believe, has a big role to play in that." He also cautioned that while cryptocurrency can benefit society, “it needs the right guardrails to prevent harm.” In Russia and Ukraine, for example, we have seen such financial innovation “employed for ill and for good,” he noted. Over the last several years, there have been numerous ransomware incidents using cryptocurrencies. On the other hand, people from around the globe have responded to Ukraine’s request for assistance by making direct donations through cryptocurrencies.
The Department of State will play an important role in the implementation of this executive order. U.S. embassies and missions around the world are ready to partner with the private sector and international bodies to support the development and use of digital asset technology in ways aligned with democratic values.
The United States remains committed to working with allies, partners, and the broader digital asset community to shape the future of digital currencies in a manner that is safe, inclusive, and consistent with our democratic values.