Admittedly - everyone in the crypto community has been holding their breath but On Wednesday March 9,2022, the Biden White House unveiled a new executive order on cryptocurrency regulation. The directive effectively lays out a general approach for how the administration intends to strike a balance between consumer protection and ensuring that the United States remains a hub for industry innovation.
The order's language appears to signal that the Biden White House is uninterested in sweeping near-term reforms and is instead focused on ensuring that agencies are on the same page in researching and observing the national security implications of the crypto industry. For those in the crypto sector concerned about aggressive government intervention, the order's language appears to signal that the Biden White House is uninterested in sweeping near-term reforms and is instead focused on ensuring that agencies are on the same page in researching and observing.
"The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk," a fact sheet issued by the White House reads.
The executive order's seven key goals are outlined in full in the press release:
Protect U.S. Consumers, Investors, and Businesses
Protect U.S. and Global Financial Stability and Mitigate Systemic Risk
Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets
Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System
Promote Equitable Access to Safe and Affordable Financial Services
Support Technological Advances and Ensure Responsible Development and Use of Digital Assets
Explore a U.S. Central Bank Digital Currency (CBDC)
While crypto investors may be relieved, lawmakers like Elizabeth Warren, who have been vocal in their criticism of the crypto field, may be less so. Warren has been critical of the industry in recent months, focusing on the environmental effects of cryptocurrencies and the investor risks associated with loose regulation of so-called stablecoin issuers and other DeFi ecosystem members.
With the exception of mentioning the price volatility of Bitcoin, the White House's communications about the EO appear to avoid mentioning any individual coins or initiatives. There was also no mention of specific verticals like DeFi or NFTs.
Some in the crypto business were concerned that the wealthy Russian elite's use of cryptocurrencies to escape sanctions might lead to a crackdown, but one anonymous senior official on a background press call seemed to dismiss this notion.
"I will say, in Russia, in particular, the use of cryptocurrency we do not think is a viable workaround to the set of financial sanctions we’ve imposed across the entire Russian economy and, in particular, to its central bank."
The order formally directs multiple government organizations to begin exploring the construction of a state-backed cryptocurrency — a U.S. dollar-backed cryptocurrency. Digital Currency Issued by Central Banks (CBDC).
"This research, combined with the framework we'll build for international engagement and competitiveness," a senior White House official said, "will help assure we maintain the United States' essential role in the global financial system."
The Takeaway
On Wednesday March 9,2022, US President Joe Biden signed a first-of-its-kind executive order on cryptocurrencies, instructing federal agencies to coordinate their approaches to the industry.
The presidential order does not specify which positions the administration wants agencies to take, nor does it impose new regulations on the industry.
One provision of the order directs the Treasury Department to produce a report on the "future of money," which will detail how the current financial system may fail to meet consumer requirements.
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