Washington, D.C. — BPI President and CEO Greg Baer issued the following statement today in response to a Presidential Executive Order directing federal agencies to address the risks posed by digital assets, study how existing regulations and policies apply and further evaluate whether there’s an appropriate role for central bank digital currency within the U.S. economy.
The Administration’s directive will lead to greater clarity for banks and other financial institutions as they consider how to continue to innovate and meet customer demand for digital assets-related products and services while appropriately managing the relevant risks. Over the last several years, Big Tech and FinTech startups have enjoyed the benefit of little to no regulatory oversight while offering an ever-expanding range of digital and crypto products and services, some of which present significant risks to unsuspecting consumers. Meanwhile, regulated financial institutions have been stuck on the sidelines waiting for further regulatory action before expanding their digital offerings.
The Executive Order will importantly also help the U.S. government to identify and thwart potential risks to national security, including efforts by rogue nation-states and foreign aggressors to use cryptocurrencies and other digital assets to evade U.S. sanctions and diminish the effectiveness of U.S. policy.
We are optimistic that today’s Executive Order will encourage expedient action by the banking and other agencies that will help to foster responsible innovation that preserves consumer protections and financial stability. We are also confident that future research into a possible U.S. central bank digital currency will conclude, consistent with past BPI research, that CBDCs would pose considerable and unavoidable costs to the financial system and economy while producing few, if any, tangible benefits.
About Bank Policy Institute.
The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.