September 23, 2022

Treasury Official Addresses Department Recommendations for Regulating Digital Assets

Treasury Under Secretary for Domestic Finance Nellie Liang outlined Treasury's recommendations for addressing risks identified in recent reports on the responsible development of digital assets.

In remarks at the Brookings Institution, Ms. Liang highlighted several recommendations following findings in recent Treasury reports on the practical uses of digital assets. The uses outlined include instant payment systems, Central Bank Digital Currencies ("CBDCs"), and the positive and negative effects of digital asset use by underserved communities. The Treasury reports were published pursuant to EO 14067 ("Ensuring Responsible Development of Digital Assets").

Ms. Liang stated that Treasury is urging regulatory agencies to continue working together to "aggressively pursue" enforcement and promote investor education, and pursue a "technology neutral" approach to regulation that would impose standards on similar products regardless of the underlying technology. She said that regulators should not only provide a regulatory framework for banking entities, but also for nonbank entities that provide payment and other financial services.

Additionally, Ms. Liang said that crypto technology has the potential to revolutionize payment systems and allow for instant payments, even internationally. She encouraged regulators to focus on underserved communities with the highest unbanked population and develop readily available instant payment systems for both government and public use.

Ms. Liang added that while CBDCs have potential benefits, regulators should thoroughly analyze the risks and benefits before implementing any products. She highlighted Treasury's plans to lead an interagency working group devoted to CBDC consideration and potential development.

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