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President Joe Biden signed an executive order on Wednesday directing federal agencies to coordinate their efforts at drafting crypto regulations. The long-awaited directive is the first-of-its-kind that exclusively focused on the growing digital asset sector amidst growing concerns of the lack of regulatory clarity in the industry, which ballooned to more than $3 trillion in market cap last November.
The Biden administration views the rising popularity of cryptos, such as Bitcoin (BTC) and Ether (ETH), as an opportunity to examine the benefits and risks of digital assets, Yahoo! News reported citing a senior government official who spoke on the condition of anonymity. The directive also urged the Federal Reserve to explore the development of a U.S. central bank digital currency (CBDC) and to assess if its issuance is deemed vital to the national interest.
“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,” according to a White House fact sheet. “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 global governance of digital assets consistent with democratic values and U.S. global competitiveness.”
The executive order pointed out six key areas while outlining its approach to mitigating the risks while harnessing the benefits of digital assets and blockchain technology. These are consumer and investor protection, financial stability, illicit activity, U.S. competitiveness on a global stage, financial inclusion, and responsible innovation.
The executive order arrived just as administration officials and lawmakers are voicing concerns that Russia might use crypto to evade sanctions due to its invasion of Ukraine. Senators Elizabeth Warren, Mark Warner, and Jack Reed asked the Treasury Department last week to explain how it intends to bar the use of crypto to evade sanctions.
Some of the crypto industry’s players welcomed the executive order. “Based on remarks, crypto [executive order] is positive and calls for coordinated and comprehensive approach to digital asset policy that will support responsible innovation,” Gemini Trust's Cameron Winklevoss posted on Twitter, according to Coindesk. “I applaud this constructive approach to thoughtful crypto regulation and look forward to working together with the various stakeholders to ensure that the U.S. remains a leader in crypto.”
