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New legislation aims for responsible control of digital assets

Will there be a United States Central Bank Digital Currency?

The Indian government wants to ban all private cryptocurrencies, with some exceptions, to pave the way for a digital money controlled by the central bank. — © AFP
The Indian government wants to ban all private cryptocurrencies, with some exceptions, to pave the way for a digital money controlled by the central bank. — © AFP

A digital asset refers to anything that is stored digitally and is uniquely identifiable that organizations can use to realize value. To meet some of the challenges within the business arena, a U.S. Executive Order on Ensuring Responsible Development of Digital Assets has been progressed.

This will apply to common digital assets such as documents, audio, videos, logos, slide presentations, spreadsheets and websites. Digital assets are also fundamental to blockchains, and these digital ledgers provide the expectation that greater control and transparency will be provided to business dealings.

The five essential elements of the Executive Order from the Biden Administration are:

  1. Consideration for the introduction of a United States Central Bank Digital Currency (CBDC).
  2. Safeguards for consumer, investor, and business protection.
  3. Maintaining financial stability and systemic risk.
  4. Putting in place measures to prevent illicit finance and national security.
  5. Offering U.S. leadership in the global financial system and putting measures in place to secure economic competitiveness.

Much of the Executive Order is concerned with the disruptive impact that blockchain technology and digital assets promise to provide. While these technologies should make business flow more smoothly there are risks of increasing financial inclusion. Furthermore, should aspects like cryptocurrency become more common place and traditional currencies become less widely accepted, this pose challenges for human rights (such as the unbanked and underbanked).

Furthermore, the data mining required presents challenges to the modern economy in relation to climate change and with the generation of environmental pollution (both data mining and grid management are heavily energy dependent).

According to a statement provided by the U.S. Chamber of Commerce Vice President for the Center for Capital Markets Competitiveness Bill Hulse to Digital Journal the development is to be welcomed.

Hulse notes: “Modernizing our public policy so that it recognizes the significant promise of digital assets is critical to the U.S. maintaining its position as a global innovation leader. The U.S. Chamber and the business community are hopeful the EO will spur original research, grounded in data, that studies the potential benefits of digital assets that are being developed by entrepreneurs in the private sector.”

He adds that the Chamber of Commerce is supportive of the measures, stating: “We look forward to an open dialogue with the Executive Branch and independent agencies, and urge Congress to build on previous work to advance legislation that appropriately tailors financial regulation for this novel asset class.”

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Written By

Dr. Tim Sandle is Digital Journal's Editor-at-Large for science news. Tim specializes in science, technology, environmental, business, and health journalism. He is additionally a practising microbiologist; and an author. He is also interested in history, politics and current affairs.

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