Biden’s Executive Order on Crypto Aims For Structure and Innovation
What the President Said
President Joe Biden’s executive order regarding cryptocurrencies had been highly anticipated prior to the release of details yesterday. Some analysts have expressed concern the US will fall behind the broader market unless it sets up a system that allows for cryptocurrencies to be created within the country.
Biden’s order notes the importance of helping the US maintain its standing as a tech leader when it comes to crypto. He discussed the need to balance risks while fostering innovation. The president explained a desire to protect consumers, businesses, the climate, and the broader financial system.
Making Crypto More Transparent
The White House released a fact sheet with the executive order, explaining 16% of Americans have either used, invested in, or traded cryptocurrencies. In addition to protecting consumers and investors, the order listed dealing with “illicit finance” as one of six priorities. Digital assets such as Bitcoin (BTC) have been associated with the so-called black market for over 10 years.
In order to achieve regulatory oversight and add more transparency to cryptocurrencies, Biden has directed the Department of the Treasury to come up with policy recommendations. Regulators and the Financial Stability Oversight Council are encouraged to look for gaps in regulation and areas that might put national security at risk. Treasury Secretary Janet Yellen argues the order will lead to fairer and more transparent markets.
Could a Digital Dollar Result?
Biden’s order didn’t just focus on cracking down on crypto, but also looked toward future growth. The word innovation is featured prominently, and the order specifically directs the US government to study the potential development of a central bank currency.
This type of digital US dollar would be issued by the Federal Reserve, differing from Bitcoin, which isn’t controlled by any single entity. Prominent members of the crypto community praised the directive, including Cameron Winklevoss, who co-founded cryptocurrency exchange Gemini. He called the order a “thoughtful” approach toward regulating the industry. The policy aims to eliminate some of the unknown regarding digital coins, and hopes to spur innovation at the same time.
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