Strengthening American Leadership in Digital Financial Technology
January 23, 2025
Action Summary
- Purpose and Policies:
- Promote U.S. leadership in digital assets, blockchain technology, and digital financial technology.
- Support innovation and economic development while protecting economic liberty, including individual access to open public blockchain networks.
- Promote the U.S. dollar’s sovereignty and development of lawful dollar-backed stablecoins globally.
- Ensure fair banking access and provide regulatory clarity through technology-neutral frameworks and well-defined jurisdictional boundaries.
- Prohibit any measures that support the establishment, issuance, circulation, or use of Central Bank Digital Currencies (CBDCs) within U.S. jurisdiction.
- Definitions:
- “Digital asset” encompasses cryptocurrencies, digital tokens, and stablecoins recorded on a distributed ledger.
- “Blockchain” is defined by shared public ledgers, cryptographic integrity, automated updates, and publicly available source code.
- “Central Bank Digital Currency” refers to digital money that is a direct liability of a central bank.
- Revocation and Rescission:
- Revokes Executive Order 14067 (March 9, 2022) and the Treasury’s Framework for International Engagement on Digital Assets (July 7, 2022).
- All inconsistent policies, directives, and guidance under previously issued orders are rescinded.
- Establishment of the President’s Working Group on Digital Asset Markets:
- Formed within the National Economic Council, chaired by the Special Advisor for AI and Crypto.
- Includes high-level representatives from the Treasury, Attorney General, Commerce, Homeland Security, OMB, National Security, Economic Policy, Science & Technology, SEC, CFTC, and others as needed.
- Tasked with reviewing existing regulations affecting digital assets and proposing updates or rescissions within set deadlines (30, 60, and 180 days).
- Mandated to develop a federal regulatory framework for digital assets and explore the feasibility of a national digital asset stockpile.
- Prohibition of Central Bank Digital Currencies:
- Agencies are prohibited from initiating, promoting, or continuing any plans related to CBDCs within the United States.
- Legal Provisions:
- Severability clause ensures that if one provision is held invalid, the remainder of the order remains effective.
- General provisions limit the order’s impact on existing executive authority and budgetary or administrative functions.
Risks & Considerations
- The Executive Order’s emphasis on digital assets and blockchain technology could lead to increased demand for expertise in these areas. Vanderbilt University may need to consider expanding its curriculum and research initiatives to include more focus on digital financial technologies.
- The prohibition of Central Bank Digital Currencies (CBDCs) could impact research and development in digital currency technologies. This may limit opportunities for collaboration with federal agencies on CBDC-related projects.
- The establishment of a Federal regulatory framework for digital assets could introduce new compliance requirements for university programs involved in digital finance research, necessitating adjustments in research methodologies and partnerships.
- The focus on promoting lawful and legitimate dollar-backed stablecoins may influence the direction of financial technology research and innovation, potentially affecting funding opportunities and strategic priorities for Vanderbilt’s finance and economics departments.
Impacted Programs
- Vanderbilt’s Owen Graduate School of Management may see increased interest in courses related to digital finance and blockchain technology, necessitating curriculum updates and potential faculty recruitment.
- The School of Engineering could benefit from increased research opportunities in blockchain technology and distributed ledger systems, potentially leading to new partnerships with industry and government agencies.
- Vanderbilt Law School may need to address new legal and regulatory challenges associated with digital assets, providing opportunities for research and policy development in financial regulation.
- The Department of Economics might explore the economic implications of digital asset markets and the prohibition of CBDCs, contributing to policy discussions and academic discourse.
Financial Impact
- The Executive Order’s focus on digital financial technology could open up new funding streams for research and development, particularly in areas related to blockchain and digital assets.
- Vanderbilt University may need to invest in new resources and infrastructure to support expanded research and educational offerings in digital finance, potentially impacting budget allocations and strategic planning.
- Changes in federal regulations and policies regarding digital assets could influence the university’s financial strategies, including endowment management and investment opportunities in digital markets.
- There may be increased opportunities for collaboration with federal agencies and private sector partners, potentially leading to new grants and contracts for research initiatives.
Relevance Score: 3 (The order presents moderate risks involving compliance and potential strategic adjustments for university programs.)
Key Actions
- Vanderbilt’s School of Engineering should explore research opportunities in blockchain technology and digital assets. By aligning with the federal focus on innovation in digital financial technology, the school can enhance its research portfolio and attract funding for projects related to blockchain and digital asset development.
- The Owen Graduate School of Management should consider developing courses or programs focused on digital finance and blockchain technology. This aligns with the executive order’s emphasis on regulatory clarity and innovation in digital assets, preparing students for emerging roles in the financial technology sector.
- Vanderbilt’s Office of Federal Relations should monitor developments from the President’s Working Group on Digital Asset Markets. Engaging with this group can provide insights into regulatory changes and potential impacts on the university’s financial operations and partnerships.
- The Department of Political Science should conduct research on the implications of prohibiting Central Bank Digital Currencies (CBDCs) in the U.S. This research can contribute to policy discussions and provide a deeper understanding of the economic and privacy implications of such prohibitions.
Opportunities
- The executive order presents an opportunity for Vanderbilt’s Law School to engage in legal research and analysis on the evolving regulatory landscape for digital assets. By contributing to the development of legal frameworks, the law school can position itself as a leader in digital asset law and policy.
- Vanderbilt can capitalize on the focus on digital financial technology by establishing partnerships with industry leaders in digital assets and blockchain. These collaborations can lead to joint research initiatives, internships, and career opportunities for students.
- The emphasis on protecting economic liberty and promoting innovation offers an opportunity for Vanderbilt’s Center for Technology Transfer and Commercialization to support faculty and student startups in the digital asset space. By providing resources and guidance, the center can help bring innovative ideas to market.
Relevance Score: 4 (The order presents significant opportunities for Vanderbilt to engage in research, education, and partnerships in digital financial technology, requiring major process changes to capitalize on these opportunities.)
Timeline for Implementation
- Within 30 days from January 23, 2025: The Department of the Treasury, the Department of Justice, the Securities and Exchange Commission, and other relevant agencies must identify all regulations, guidance documents, orders, or other items that affect the digital asset sector.
- Within 60 days from January 23, 2025: Each agency shall submit recommendations on whether each identified item should be rescinded, modified, or adopted in a regulation.
- Within 180 days from January 23, 2025: The President’s Working Group on Digital Asset Markets is required to submit a report to the President evaluating regulatory and legislative proposals.
Relevance Score: 4
Impacted Government Organizations
- Department of the Treasury: Tasked with revoking previous directives and frameworks related to digital assets and ensuring compliance with the new policies set forth by the order.
- Department of Justice: Involved in reviewing and advising on regulatory modifications impacting the digital asset sector.
- Department of Commerce: A key member of the Working Group, contributing to the formulation of federal regulatory measures for digital financial technology.
- Department of Homeland Security: Included in the Working Group to provide insights on security and risk management within the digital asset infrastructure.
- Office of Management and Budget (OMB): Engaged in the coordination and oversight of budgeting, administrative, and regulatory proposals affecting digital assets.
- Securities and Exchange Commission (SEC): Represented in the Working Group to address market structure, consumer protection, and regulatory clarity in the digital asset domain.
- Commodity Futures Trading Commission (CFTC): Participates in the Working Group to ensure that oversight of derivatives and related markets aligns with the digital assets framework.
Relevance Score: 3 (Approximately 7 key federal agencies are directly impacted by the executive order.)
Responsible Officials
- Secretary of the Treasury – Directed to revoke prior frameworks and ensure all policies, directives, and guidance inconsistent with this order are rescinded or modified, thereby executing key aspects of this directive.
- Special Advisor for AI and Crypto – Appointed as the Chair of the President’s Working Group on Digital Asset Markets, coordinating the group’s activities and implementation efforts.
- Working Group Members – Including:
- Attorney General – Responsible for reviewing and recommending modifications to digital asset regulations.
- Secretary of Commerce – Tasked with advising on technological and economic policy matters concerning digital assets.
- Secretary of Homeland Security – Charged with integrating national security considerations into digital asset oversight.
- Director of the Office of Management and Budget – Oversees the regulatory and budgetary aspects of the implementation process.
- Assistant to the President for National Security Affairs – Provides national security perspectives on digital asset market policies.
- Assistant to the President for National Economic Policy (APEP) – Leads the submission of recommendations and reports to the President, guiding the regulatory framework.
- Assistant to the President for Science and Technology – Offers insight into emerging technologies relevant to digital assets.
- Homeland Security Advisor – Assists in ensuring that digital asset policies conform to national security requirements.
- Chairman of the Securities and Exchange Commission – Oversees securities-related aspects of the digital asset market, ensuring compliance and consumer protection.
- Chairman of the Commodity Futures Trading Commission – Involved in examining market structures and ensuring appropriate oversight of digital asset derivatives.
- Enforcement Agencies’ Heads (e.g., from the Department of Justice and the SEC) – Mandated to identify and review existing regulations, guidance documents, and orders affecting the digital asset sector, and suggest necessary modifications.
Relevance Score: 5 (Directives affect multiple agency heads and Cabinet-level officials, reflecting high-level strategic implications).