Treasury Seeks Input on Digital Assets

The Department of Treasury is requesting comments regarding potential opportunities and risks presented by the development and adoption of digital assets.

The July 8 request comes following the March 28 Executive Order, “Ensuring Responsible Development of Digital Assets,” directing the Treasury—in consultation with the Secretary of Labor and other relevant agencies—to review and develop policy recommendations on the use of digital assets, as well as report on changes in financial market and payment infrastructures for U.S. consumers, investors and businesses. 

That order outlined the principal U.S. policy objectives with respect to digital assets: 

• protection of consumers, investors and businesses in the U.S.;  
• protection of U.S. and global financial stability and the mitigation of systemic risk; 
• mitigation of illicit finance and national security risks posed by misuse of digital assets; 
• reinforcement of U.S. leadership in the global financial system, including through the development of payment innovations and digital assets; and 
• promotion of access to safe and affordable financial services.

“For consumers, digital assets may present potential benefits, such as faster payments, as well as potential risks, including risks related to frauds and scams,” Nellie Liang, Under Secretary of the Treasury for Domestic Finance, said in a statement. “The Treasury Department is seeking to benefit from the expertise of the American people and market participants by soliciting public comment as we engage in this important work.”

The request for comment includes five sections, with each section containing a broader set of questions that asks respondents to identify and describe, among other things:  

• key trends and reasons why digital assets have gained popularity and increased adoption in recent years and what factors would further facilitate mass adoption;
• the main opportunities for consumers, investors and businesses, with a request to provide data and specific use cases to date (if any) describing the opportunities;
• any risks arising from current market conditions in digital assets and any potential mitigating factors, including with respect to market transparency, accuracy of market data, technological and security risks, settlement and custody, and jurisdictional and legal conditions; 
• potential risks to consumers, investors and businesses that may arise through engagement with digital assets; and 
• whether digital assets can play a role in increasing underserved Americans’ access to safe, affordable and reliable financial services.

Treasury notes that the term “mass adoption” is defined as a scenario where digital assets are accepted and used by the U.S. public on a large scale. For example, mass adoption of digital assets as a payment method would translate to use and acceptance of cryptocurrencies as a common and regular payment method for goods and services. In addition, regardless of the label used, a digital asset may be, among other things, a security, a commodity, a derivative or other financial product that may be exchanged across digital asset trading platforms, including centralized and decentralized finance platforms, or through peer-to-peer technologies. 

Treasury also notes that it welcomes input on any matter that commenters believe is relevant to the development of the report on the implications of digital assets, and changes in financial market and payment infrastructures. 

Comments must be received by Aug. 8, 2022.