FOR IMMEDIATE RELEASE
March 14, 2022
Statement in Response to Biden Administration Executive Order on Digital Assets
In response to the issuance of an executive order on digital assets by President Biden today, Americans for Financial Reform Education Fund (AFR) and Demand Progress Education Fund issued the following statement:
“The administration’s order includes the recognition that the rapid growth of digital assets as instruments for financial speculation is creating a wide range of serious risks and harms for consumers, investors, and the public at large. It is important that the order recognizes and articulates a set of these risks, and a whole of government approach can help address the scale and scope of the potential harm. It will be important for the studies authorized by the order to generate useful data and momentum for decisive regulatory action,” said Mark Hays, senior policy analyst with AFR and Demand Progress.
“It is also important that the order prioritizes research and development focused on the potential creation of a central bank digital currency (CBDC), and that such efforts will evaluate the potential privacy and consumer risks for CBDCs, as well as benefits. A CBDC – if properly developed to ensure privacy and other protections for consumers and users so that people can feel confident their transactions are safe and secure – has real potential to achieve broad use and buy-in and significantly improve financial inclusion for those who have been shut out or marginalized by traditional financial institutions and systems.
However, despite these advances, we’re disappointed the order does very little to direct agencies to act now to exert their existing authority over dangerous and risky financial activities fueled by unregulated or underregulated digital assets. These risks are already front and center for markets and consumers and grow by the day. It’s clear regulators have the ability, mandate and need to address problems, without further study or direction from Congress. The order must not be allowed to chill such efforts, or give a pass for illegal or abusive conduct,” said Hays.
AFR and Demand Progress also expressed concern that the Administration’s order comes as the cryptocurrency industry and the wealthy investors flex their political muscle. Numerous reports have documented the rapid increase in political spending by cryptocurrency companies and their backers. They have also given the political revolving door a heavy spin, with many industry-affiliated individuals taking positions in government and former government officials leaving and taking industry roles to cash in on the industry’s growth. AFR and Demand Progress called on the Administration, and Congress to stand up vigorously for the public interest in the face of this influence.
“We are concerned by the elements of this order that embrace the notion that anything called ‘innovation’ must be good for consumers and the public, or that claims regarding inclusion necessarily reflect actual impacts, despite much uncertainty about whether particular products and practices are truly useful, valuable or worth the risks. And we are troubled by indications that the cryptocurrency industry has quickly learned an unfortunate truth about Washington: money talks,” said Hays.
“We urge the Administration to resist adopting a rose-colored view towards industry claims about crypto innovation and its potential benefits. The agencies tasked with fulfilling the directives of this order should take the risks posed by the industry seriously and focus on what is needed to protect consumers’ rights and privacy, markets and our financial system from reckless speculation, and challenges the encroachment of Big Tech into the financial services industry. The Administration and Congress should not allow the reports produced by this order to pave the way for deregulatory measures that create a ‘regulation-light’ regime and subject digital assets to lower levels of scrutiny.”