The Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Commerce, the Administrator of the US Agency for International Development (USAID), and the heads of other relevant agencies, delivered to President Joe Biden a digital framework for interagency engagement with foreign counterparts.
The US Treasury set out the call for an interagency approach in a document on 7 July called 'Fact Sheet: Framework for International Engagement on Digital Assets.'
The Executive Order addressed "the risks and harness the potential benefits of digital assets and their underlying technology, including through international engagement to adapt, update, and enhance adoption of global principles and standards for how digital assets are used and transacted".
The Executive Order also directed the US government "to promote development of digital asset and central bank digital currencies (CBDC) technologies consistent with our values and legal requirements.
"What's outlined in the framework is intended to ensure that, with respect to the development of digital assets, America's core democratic values are respected; consumers, investors, and businesses are protected; appropriate global financial system connectivity and platform and architecture interoperability are preserved; and the safety and soundness of the global financial system and international monetary system are maintained."
Technology-driven financial innovation is frequently cross-border and can impact households, businesses, and governments across the world, it said.
"International cooperation among public authorities, the private sector, and other stakeholders is therefore critical to maintaining high regulatory standards and a level playing field, expanding access to safe and affordable financial services, and reducing the cost of domestic and cross-border payments, including through the continued modernization of public payment systems.
"Uneven regulation, supervision, and compliance across jurisdictions creates opportunities for arbitrage and raises risks to financial stability and the protection of consumers, investors, businesses, and markets.
"Inadequate anti-money laundering and combating the financing of terrorism (AML/CFT) regulation, supervision, and enforcement by other countries challenges the ability of the United States to investigate illicit digital asset transaction flows that frequently jump overseas, as is often the case in ransomware payments and other cybercrime-related money laundering.
"Frictions lead cross-border payments and remittances to be slow and costly, particularly when sent to developing or emerging economies", it further said.
Objectives of the framework
The framework is guided by the principal policy objectives of the United States as laid out in the Executive Order on Ensuring Responsible Development of Digital Assets (March 9, 2022) and tailored to reflect the international aspects of our work:
Protect consumers, investors, and businesses in the United States and globally by promoting technology and regulatory standards that reflect U.S. values;
Protect U.S. and global financial stability and mitigate systemic risk;
Mitigate illicit finance and national security risks posed by misuse of digital assets and counter and respond to efforts by foreign adversaries to drive standards and promote their protocols;
Reinforce U.S. leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets and by advancing technology and regulatory standards that align with U.S. values;
Promote access to safe and affordable financial services; and
Support technological advances that promote responsible development and use of digital assets by advancing research and relationships that increase shared learning.
The United States Government has been active in international fora and bilateral partnerships on many of these issues and will continue to work to amplify and expand these efforts to meet the President's policy objectives.
