[Federal Register Volume 87, Number 97 (Thursday, May 19, 2022)]
[Notices]
[Pages 30450-30452]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10731]


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DEPARTMENT OF COMMERCE

International Trade Administration

[Docket No. 220509-0112]
RIN 0625-XC047


Developing a Framework on Competitiveness of Digital Asset 
Technologies

AGENCY: International Trade Administration, Department of Commerce.

ACTION: Notice; request for comment.

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SUMMARY: Executive Order of March 9, 2022, ``Ensuring Responsible 
Development of Digital Assets'', outlines U.S. policy objectives with 
respect to digital assets. The Executive Order directs the Secretary of 
Commerce, in consultation with the Secretary of State, the Secretary of 
the Treasury, and the heads of any other relevant agencies, to 
establish a framework for enhancing U.S. economic competitiveness in, 
and leveraging of, digital asset technologies. Through this Request for 
Comment (RFC), the Department of Commerce (Commerce) is requesting 
input from the public that will inform the development of the 
framework.

DATES: Written comments must be received on or before 5 p.m. Eastern 
Time on July 5, 2022.

ADDRESSES: Written comments may be submitted in response to this 
document by comment through www.regulations.gov on Docket ITA-2022-0003 
or by email to [email protected].
    Instructions: Commerce invites comments on the full range of issues 
presented in this Notice, including issues that are not specifically 
raised in questions in this Notice. Comments submitted by email should 
be machine-readable and should not be copy-protected. Commenters should 
include the name of the person or organization filing the comment, 
which will facilitate agency follow-up for clarifications as necessary, 
as well as a page number on each page of their submissions. All 
comments received are a part of the public record and will be posted on 
www.regulations.gov without change. All personal identifying 
information (for example, name, address) voluntarily submitted by the 
commenter may be publicly accessible. Comments should not include any 
business confidential or other sensitive or protected information.

FOR FURTHER INFORMATION CONTACT: Please direct questions regarding this 
Notice to Vincent Tran, International Trade Specialist, telephone: 202-
482-2967, email: [email protected],

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indicating ``Notice and Request for Comment'' in the subject line, or, 
if by mail, addressed to International Trade Administration, U.S. 
Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 
20230. Please direct media inquiries to ITA's Office of Public Affairs, 
[email protected] or (202) 482-3809.

SUPPLEMENTARY INFORMATION: 

I. Background

    Executive Order 14067 of March 9, 2022, ``Ensuring Responsible 
Development of Digital Assets'' (hereafter ``Executive Order'') (87 FR 
14143; March 14, 2022), outlines U.S. policy objectives with respect to 
digital assets,\1\ including but not limited to protecting consumers, 
investors, and businesses; mitigating systemic financial risk; 
mitigating the illicit finance and national security risks posed by 
misuse of digital assets; and supporting technological advancements 
that promote responsible development and use of digital assets. The 
Executive Order outlines the Federal government's approach to the 
development of the U.S. digital assets sector. Section 2 of the 
Executive Order provides six principle policy objectives for digital 
assets: (a) Protection of consumers, investors, and businesses in the 
United States; (b) protection of United States and global financial 
stability and the mitigation of systemic risk; (c) mitigation of 
illicit finance and national security risks posed by misuse of digital 
assets; (d) reinforcement of 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; (e) promotion of access to safe and affordable financial 
services; and (f) support of technological advances that promote 
responsible development and use of digital assets.
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    \1\ As defined in the Executive Order, ``digital assets'' refers 
to ``all [central bank digital currencies (CBDCs)], regardless of 
the technology used, and to other representations of value, 
financial assets and instruments, or claims that are used to make 
payments or investments, or to transmit or exchange funds or the 
equivalent thereof, that are issued or represented in digital form 
through the use of distributed ledger technology. For example, 
digital assets include cryptocurrencies, stablecoins, and CBDCs. 
Regardless of the label used, a digital asset may be, among other 
things, a security, a commodity, a derivative, or other financial 
product. Digital assets may be exchanged across digital asset 
trading platforms, including centralized and decentralized finance 
platforms, or through peer-to-peer technologies.''
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    Section 8(a) provides the Administration's policy on fostering 
international cooperation and United States competitiveness with 
respect to digital assets and financial innovation. Among other items, 
Section 8(a) notes that (i) technology-driven financial innovation is 
frequently cross-border and requires coordination among public 
authorities, particularly with respect to maintaining high regulatory 
standards; (ii) the United States government has been active in 
international fora on issues related to technology-driven financial 
innovation, including at the Financial Action Task Force (FATF); (iii) 
the U.S. presidency of the 2020 G7 saw the establishment of the G7 
Digital Payment Experts Group to discuss CBDCs, stablecoins, and other 
digital payment issues; (iv) the United States continues to support the 
G20 roadmap for addressing challenges and frictions with cross-border 
funds transfers and payments; and (v) the Biden-Harris Administration 
will elevate the importance of these topics and expand engagement with 
critical international partners, including through fora such as the G7, 
G20, FATF, and Financial Stability Board. United States engagement will 
focus on respect for core democratic values, protection of consumers, 
investors, and businesses, preservation of global financial system 
connectivity and platform interoperability, and maintenance of the 
safety and soundness of the global financial system and international 
monetary system.
    Section 8(b)(iii) of the Executive Order directs the Secretary of 
Commerce, in consultation with the Secretary of State, the Secretary of 
the Treasury, and the heads of any other relevant agencies, to (within 
180 days of the date of the Executive Order) establish a framework for 
enhancing U.S. economic competitiveness in, and leveraging of, digital 
asset technologies. Through this RFC, Commerce is requesting input from 
the public that will inform Commerce's work in developing the scope of 
the framework, in consultation with the Secretary of State, the 
Secretary of the Treasury, and the heads of other relevant agencies.

II. Objective of this RFC

    This RFC offers an opportunity for all interested parties to 
provide relevant input and recommendations for consideration in 
Commerce's development of the economic competitiveness framework as 
directed by Section 8(b)(iii) of the Executive Order.

III. Request for Comments

    Commerce welcomes input on any matter that commenters believe is 
relevant to Commerce's development of the framework for enhancing U.S. 
economic competitiveness in, and leveraging of, digital asset 
technologies, pursuant to Section 8(b)(iii) of the Executive Order. 
Commenters are encouraged to address any or all of the following 
questions, or to provide any other comments relevant to the development 
of the framework. When responding to one or more of the questions 
below, please note in your response the number(s) of the questions you 
are responding to.
    Commerce also seeks public comment on the following questions.

Competitiveness

    (1) What are the features of U.S.-based digital asset businesses 
(e.g., administrators, operators, validators, and other key stakeholder 
roles in the function of digital assets as well as the exchanges, 
brokers, and custodians used to trade and store them) that currently 
underpin their competitiveness in a global market? Will these features 
support future competitiveness?
    (2) What obstacles do U.S. digital asset businesses face when 
competing globally? How have these obstacles changed over the past five 
years and are any anticipated to disappear? Are there clearly 
foreseeable new obstacles that they will face in the future? What steps 
could the U.S. government take to remove, minimize, or forestall any 
obstacles?
    (3) How does the current U.S. regulatory landscape affect U.S. 
digital asset businesses' global competitiveness? Are there future 
regulatory shifts that could support greater global competitiveness of 
U.S. digital asset businesses? How does the U.S. regulatory landscape 
for digital assets compare to that in finance or other comparable 
sectors?
    (4) What are the primary challenges to U.S. technological 
leadership in the digital assets sector?
    (5) What impact, if any, does the global nature of the digital 
assets sector have on U.S. digital asset businesses' ability to attract 
and retain talent and maintain leadership in development and operation 
of digital asset technologies within the United States?
    (6) What, if any, is the future role of digital assets mining \2\ 
in the U.S. digital

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assets sector? Can digital assets be compatible with a low-carbon 
economy that emphasizes renewable energy? If so, how? In what ways can 
the U.S. government and U.S. companies drive competitive, sustainable 
(for the environment and energy consumption) development of digital 
assets?
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    \2\ The Organization for Economic Cooperation and Development 
defines mining as follows: ``For some blockchains, in order to add 
blocks to the ledger, transfers must go through a mining process. 
Mining is a way of adding transaction records, via blocks, onto a 
public ledger. Miners are nodes in the network that ensure the 
transactions in the block are valid. Specifically, they ensure that 
senders have not already used the funds they want to send to 
receivers. Once miners finish the verification, they have to ask the 
network for consent to add the new block to the ledger. In order to 
do so, they have to follow the consensus mechanisms chosen for the 
platform.'' OECD Blockchain Primer
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    (7) What impact, if any, will global deployment of central bank 
digital currencies (CBDC) have on the U.S. digital assets sector? To 
what extent would the design of a U.S. CBDC (e.g., disintermediated or 
intermediated, interoperable with other countries' CBDCs and other 
domestic and international financial services, etc.) impact the sector?
    (8) Should digital assets be given specific consideration in trade 
agreements? If so, to what extent? What types of provisions would be 
beneficial to the U.S. digital assets sector in the United States? Are 
there provisions that would be beneficial to U.S. businesses and 
consumers?
    (9) What other factors related to economic competitiveness should 
Commerce consider in the development of the framework?
    (10) Beyond enhanced economic competitiveness, how can the U.S. 
digital assets sector advance the other objectives outlined in the 
Executive Order? These other objectives include protection of 
consumers, investors, and business in the United States; protection of 
United States and global financial stability and the mitigation of 
systemic risk; and mitigation of illicit finance and national security 
risks posed by misuse of digital assets.
    (11) By what metrics should we measure the competitiveness of the 
U.S. digital assets sector in the global market? Are there existing 
measurements or data against these metrics?

Comparisons to `Traditional' Financial Services and Financial Inclusion 
Considerations

    (12) What factors and conditions, if any, that have driven and 
sustained the global leadership of U.S.-based legacy financial 
institutions will foster the same leadership for U.S. digital asset 
businesses? If there are no common factors, what factors and conditions 
will differentiate global competitiveness for U.S. digital asset 
businesses?
    (13) Can digital assets improve international payments (including 
trade and remittances), and improve on access to trade finance? If so, 
how? How do digital assets compare to other initiatives in payments 
such as the Federal Reserve's FedNow?
    (14) According to the FDIC's 2019 ``How America Banks'' survey, 
approximately 94.6 percent (124 million) of U.S. households had at 
least one bank or credit union account in 2019, while 5.4 percent (7.1 
million) of households did not. Can digital assets play a role in 
increasing these and other underserved Americans' access to safe, 
affordable, and reliable financial services, and if so, how? What role 
can the Federal government and the digital assets sector play to ensure 
that underserved Americans can benefit from the increased commercial 
availability of digital assets?

Technological Development

    (15) To what extent do new standards for digital assets and their 
underlying technologies need to be maintained or developed, for 
instance those related to custody, identity, security, privacy, and 
interoperability? What existing standards are already relevant? How 
might existing standardization efforts be harmonized to support the 
responsible development of digital assets?
    (16) What new security concerns does increased adoption of digital 
assets raise? How can the U.S. government collaborate with U.S. digital 
asset businesses to protect consumers' access to their assets, personal 
information, and other sensitive data?
    (17) To what extent will interoperability between different digital 
asset networks be important in the future? What risks does a lack of 
interoperability pose? And what steps, if any, should be taken to 
encourage interoperability?

Diane Farrell,
Deputy Under Secretary for International Trade.
[FR Doc. 2022-10731 Filed 5-18-22; 8:45 am]
BILLING CODE 3510-DR-P