While many digital-asset-related activities fall within existing U.S. laws and regulations, the rapid evolution and adoption of digital assets highlight unique risks that warrant a more comprehensive and aligned approach by agencies across the U.S. government with different regulatory remits. The Federal Reserve, as an independent central bank, is only one part of the puzzle. Many of these other stakeholders across the U.S. government, such as the Treasury Department, market regulators, and federal banking supervisors, will be involved in providing guidance and guardrails to the financial system as the universe of digital assets continues to evolve.7 In the current environment of rapid technological change, it is crucial that innovation proceeds responsibly in order to safeguard the stability of the financial system. To that end, on March 9 of this year, President Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets. 8 This executive order outlined the first whole-of-government approach to addressing the risks and harnessing the potential  2/5  BIS - Central bankers' speeches  benefits of digital assets and their underlying technology. In response, over the past six months, agencies across the government have worked together to develop frameworks and policy recommendations that advance the six key priorities identified in the executive order: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. The executive order will be a catalyst to increased coordination among U.S. regulators.

Second, innovative financing solutions. To meet Asia’s green financing needs, it is not enough to rely on just the public sector or the banking sector. We need innovative platforms to catalyse capital flows to marginally bankable but worthy green projects. In Singapore, one of our sovereign wealth funds, Temasek, has partnered HSBC to set up a debt financing platform to invest in marginally bankable sustainable infrastructure projects in Asia. We need new instruments such as blended finance to draw in different types of financers. Government agencies and multilateral development banks can potentially help to derisk sustainability projects by taking on first loss equity or providing a guarantee, to help crowd-in more private sector financing. This includes not just commercial banks but also capital providers such as foundations and family offices. We need to deploy technical assistance alongside financing. This is to support a range of activities such as project preparation, project implementation, and even training and capacity building to achieve maximum development impact. Third, financial supervision. Regulators are in a strong position to steward the financial system towards net zero through supervising financial institutions’ management of climate related risks. The Network for Greening the Financial System, or NGFS, plays a key role in helping to mainstream climate-related risk management. The NGFS has just issued a report highlighting the different paths that supervisors can take towards a set of internationally aligned supervisory practices. We strongly support the NGFS Declaration1 to green the financial system. The MAS is progressively embedding climate risk considerations in its supervisory framework.