Earlier today, US President Joe Biden signed an executive order directing agencies across the federal government to consider new regulations for digital currencies. Biden calls on agencies across the Federal Government to coordinate these efforts in order to gauge the benefits and risks posed by cryptocurrency ownership, and whether to create an American digital currency. This highly anticipated executive order on digital assets by the US President appears to take a supportive stance toward the industry.
The new order is one of the biggest and most comprehensive efforts the Biden administration is showing to regulate an industry that is growing rapidly. This is as close to an embrace of crypto by the Biden administration. These significant efforts by Mr President have been identified would encourage innovation that would identify and most importantly mitigate the risks to consumers, investors, business and the American economy. The order, titled “Ensuring Responsible Development if Digital Assets,” outlined the risks cryptocurrencies pose to the economy but most importantly noted their possible benefits.
Biden’s executive order revolves around six priorities majorly, they are “consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”
The executive order by the White House has instructed various government agencies, including the Commerce and Treasury departments, to wake up to federal approaches to regulating digital assets. It also asks agencies to review the possibility of issuing digital versions of the dollar, tasking the Justice department with assessing if it would require new legislation and possibly preparing such legislation. Director of Biden’s National Economic Council, Brian Deese while making a statement said that “We need a comprehensive, all-of-government framework to address the emerging risks and opportunities that digital assets pose.”
Every day digital assets including cryptocurrencies continue to set new records and grow in popularity. In November according to the White House fact sheet Digital assets surpassed $3 trillion in value. Reports say that about 16% of American adults, or roughly 40 million people, have at one point or the other invested in or traded or used crypto. These numbers are heavy and continue to grow rapidly. The executive order, which attempts to fix the lack of a framework for the U.S. development of cryptocurrencies, has been broadly welcomed by the industry and its investors.
Bitcoin which has become one of the most common forms of cryptocurrencies globally, Bitcoin saw its jump by the dollar value of about 9% to $42,300, on track for its largest percentage gain since Feb. 28 according to Coin Metrics. Ether, the coin linked to the Ethereum blockchain network wasn’t left behind as it added 6.3% to $2,740, also set for its best day this month. “We applaud the White House for recognizing this as a defining moment for U.S. innovation on the world stage,” said Faryar Shirzad, chief policy officer at the largest U.S. crypto exchange, Coinbase Global Inc., in a series of tweets.
The executive order has called on the Department of Treasury to assess and come up with policy recommendations and also encourages the Financial Stability Oversight Council to identify risks and develop policy recommendations on regulatory gaps, and it calls for a focus on coordinated action across federal agencies to prevent illicit finance and national security risks.
Treasury Secretary Janet Yellen has said the presidential executive order will go a long way to help the government to ensure markets are fairer, more stable transparent. In a statement, Yellen said that “This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses,” Yellen further disclosed that “It will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy.”
Biden’s order has also directed the Department of Commerce to create new frameworks that can drive the country’s competitiveness and leadership on cryptocurrencies, also to create frameworks that support the responsible development, design, and implementation of cryptosystems, among other provisions.
The executive order has also called on the federal government to look into exploring a US Central Bank Digital Currency by urgently investing in research and development of a potential United States CBDC, should issuance be deemed in the national interest.
The executive order kicks off a six-month-long process for the regulatory agencies with jurisdiction in crypto to examine the industry. AT the end of the six months, after seeing the results of the study and investigation, there could be specific policy proposals from different regulatory agencies.