The U.S. president issued an executive order that sets a structured path for cryptocurrency growth within the country to support technological advances.
With this executive order, Biden demands that the government examines the risks and benefits of cryptocurrencies. It is a long-awaited directive for the crypto industry, and it will have an impact on the nascent digital asset market.
Before the order, there had been reports of a division between the White House officials and Treasury Secretary Janet Yellen regarding the policy rollout.
The crypto world got hold of the executive order overnight after the Treasury accidentally put out a statement, now deleted, calling it historic.
It was signed on Wednesday, March 9th, and it calls federal agencies to unite and take an approach to regulation and oversight of digital assets.
The document is comprehensive and focuses on six areas:
- Consumer protection.
- Financial Stability.
- Illicit activity.
- U.S. Competitiveness.
- Financial inclusion.
- Responsible innovation.
Here are some critical takes from the document:
This part is key to the directive since there are countless stories of investors falling from crypto scams or of people losing significant sums of money through cyberattacks on exchange platforms or users themselves.
Biden called for the Treasury to assess and create a policy for crypto. He also called for regulators to ensure sufficient oversight and safeguard was put into place.
One of the crypto world’s increasing concerns are stablecoins, digital tokens that are meant to be attached to the value of existing currencies like the U.S. dollar. The largest stablecoin globally is Tether, but regulators have said it is not sufficiently backed by dollars in reserve. This topic is vital in protecting consumers, and it is absent in the announcement.
In the directive, Biden is adamant about rooting out illegal activity from the crypto. He called for coordinated action from federal agencies to mitigate such activity, which poses a financial and national security risk. He also urged international collaboration to be found to manage this issue.
His fears are not unfounded since just last month, U.S. officials seized $3.6 billion worth of bitcoin related to the 2016 hack of Bitfinex, a crypto exchange platform.
This topic becomes more relevant today because of the government’s concerns on crypto used as aid to sanctioned Russian individuals and companies.
Biden also called, more subtly, to revise the energy costs of cryptos. He asked the government to study how to make crypto-movements more environmentally responsible and find a mechanism that mitigates the impact of crypto mining upon the planet.
The Biden administration also made clear it wants to explore a digital version of the dollar, which is genuinely historic since it makes the idea of mass adoption of cryptocurrency a real possibility.
This announcement comes as China has led the change towards central bank digital currencies and with more and more people using their phones to handle their finances.
It could be comfortably implied from the announcement’s language that this directive seeks giving the U.S. a competitive edge over other countries regarding crypto development. By following this path, America’s role in the new financial order will be cemented, considering China has banned cryptocurrencies.