Biden’s Executive Order on Crypto — What You Should Know
Prices of bitcoin and other cryptocurrencies surged on Wednesday, March 9, 2022. These higher prices came after US President Joe Biden signed an Executive Order addressing the lack of a framework for the US development of cryptocurrency. However, some critics think Biden’s executive order could leave the US lagging behind the rest of the world. Let’s comb through this new development to understand better how it will impact cryptocurrency developments and growth in the industry.
Nearly 40 million Americans invest in, trade, or use cryptocurrencies. So, it’s no surprise that digital assets have experienced massive growth over the past few years, increasing from a $14 billion market cap to $3 trillion in less than five years. What’s more, more than 100 countries are piloting or considering Central Bank Digital Currencies (CBDCs).
However, not everyone in the US Administration has always agreed on unifying the regulation and oversight of digital assets. For example, we’ve seen reports of delays due to disagreements between White House officials and Treasury Secretary Janet Yellen. And that dividedness isn’t likely to change soon, no doubt. Nevertheless, a White House fact sheet outlines some background on the long-awaited directive:
“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. The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate. And, it must play a leading role in international engagement and the global governance of digital assets consistent with democratic values and US global competitiveness.”
From what we can tell, the crypto industry has responded positively to the new policy rollout — hence the $42,000 price surge of bitcoin and other cryptocurrencies on Wednesday! Still, let’s look next at the six critical areas of the measures President Biden spotlights. According to the White House fact sheet (mentioned earlier), here’s a summary of actions the new Order calls for:
Lastly, the Executive Order lays out a call to explore a US Central Bank Digital Currency by prioritizing research and development in the digital asset space. With the Administration’s commitment to work across agencies and with Congress, we anticipate our leaders establishing policies that protect against risks and usher in responsible innovation.
Some experts think the government had a wake-up call to the commercial internet in 1996 and 1997. Many of those same experts believe that the delivery of this new policy is similar to that big change, creating a unique “watershed moment.”
Perhaps this agenda has arrived at the perfect time, working to remove uncertainty and doubt. After all, the crypto industry has already had its fair share of regulatory hiccups and scandals. Naturally, events such as BlockFi’s $50 million fine from the SEC, for example, only rock the industry as a whole.
As a result, we have a handful of risk management considerations related to the new Executive Order, such as:
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