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The United States Needs a National Crypto Director

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Marc Boyd
March 25, 2022

On March 9th of this year, President Biden signed an Executive Order directing Federal agencies to examine their current, or lack of, policies regarding cryptocurrency. Specifically, agencies were given up to 120 days to devise policy recommendations relating to six priority areas: consumer protection, financial stability, illicit finance, economic competitiveness, financial inclusion and innovation.

This move comes at a time when issues and discussions surrounding cryptocurrency are becoming more and more mainstream. Less than a day after the president issued Executive Order 14067, Politico reported that Democrats in the United States Senate, led by Massachusetts Senator Elizabeth Warren, were pushing for major cryptocurrency exchanges to block access to sanctioned Russian firms and individuals amidst the ongoing Russian invasion of Ukraine. Just a few days later, BBC reported a significant rise in the use of crypto in Afghanistan, as their nation’s banking system suffers a crisis of effectiveness and public trust under Taliban rule. Here in the United States, New York City Mayor Eric Adams recently travelled to Miami to speak at a conference on cryptocurrency.

Over the last several months, prior to the new Executive Order, a handful of agencies have already rolled out new initiatives relating to the use (and misuse) of digital currencies. In February, the Federal Reserve released a discussion paper examining the possibility of introducing a U.S. central bank digital currency—a topic for which they are currently seeking public comment. Also in February, the Secret Service, as part of their mission to protect the nation’s financial infrastructure, launched a Cryptocurrency Awareness Hub in an effort to “[combat] illicit use of digital assets as well as provide public awareness information on digital asset security.” That same month, the Treasury Department launched a similar initiative through their Financial Literacy Education Commission, while the Department of Justice announced a new team headed by the first Director of National Cryptocurrency Enforcement.

The bottom-line? Crypto is in and it’s not going anywhere.

It makes sense, then, that the administration has undertaken to build a unified regulatory framework, and no doubt there will be plenty of policy recommendations to choose from as the various stakeholders evaluate the current state of play. But it will not be enough simply to form an interagency working group or blue-ribbon commission to study and discuss crypto use and enforcement. Perhaps more accurately, it would be a waste of time because the chief recommendation that any such taskforce worth its salt would return is already clear: we need a National Director for Crypto to coordinate these efforts under one, centralized authority, if not one roof, and we need it now while we are still in the Wild West days of this new frontier.

The implications of the rise of cryptocurrency, both domestically and globally, are simply too great to leave to individual departments and jurisdictions to figure out for themselves. The national security and global geopolitical implications of crypto use by hostile foreign governments and non-state actors alone warrant high-level White House coordination. Add in the fact that nearly 20% of Americans have now invested, traded or otherwise used some form of virtual currency, along with the reality that this use has revolutionized money laundering, drug trafficking, tax evasion and a host of other organized criminal acts, and it’s impossible to ignore the continued and growing impact crypto will have on our lives in the years and decades ahead. The time is now for the Federal government to prepare and act to meet these challenges.

There are several options for where to situate this position. One attractive possibility is the newly created Office of the National Cyber Director which serves as “the principal advisor to the President on cybersecurity policy and strategy, and cybersecurity engagement with industry and international stakeholders” according to the office’s White House webpage. A Deputy Director for Cryptocurrency could easily slot into this office while avoiding the expense and org chart hang-wringing that typically comes with standing up a new position at this level. This would also make sense given the NCD’s mission, as cryptocurrency clearly falls within the purview “cybersecurity policy and strategy.”

Another potential landing spot could be within the National Security Council’s Office of Cybersecurity and Emerging Tech Policy, although the sheer size and portfolio of the NSC, which also has a Deputy National Security Advisor for Cybersecurity, could hamper effective execution of the job while further muddying the organizational waters in an office already prone to mission creep. Still, if the structural lines could be clearly drawn, housing this new position under the NSC would lend immediate clout and legitimacy that the Office of the National Cyber Director has not yet built.

Wherever the new position is located, it is essential that the administration move now to ensure that crypto enforcement and regulatory policy be brought under central coordination while the various initiatives and centers mentioned above are being developed, and while this rapidly evolving policy area is still in its infancy.

Author: Marc Boyd is a Federal civil servant and former Presidential Management Fellow. He has held appointments with the United States Air Force, Space Force, and Department of Housing and Urban Development, and holds a Master of Public Administration from CUNY Baruch College. He can be reached at [email protected].

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