President Joe Biden has issued an executive order outlining a series of possible new regulatory policies for cryptocurrencies and digital assets. The order calls for the centralization of enforcement, in an attempt to move away from the current patchwork approach, and sets out the dual goals of protecting consumers and mitigating the human and fiscal costs of crypto misuse.
The main promise of cryptocurrencies, the ability to conduct business safely without relying on the financial sector, is generally seen as a positive thing, but critics have pointed out that it is a very unregulated market and that cryptocurrencies are used too often. . for illegal drug transactions. , weapons, etc.
One of the order's proposals would see the creation of a central bank digital currency (CBDC), backed by the Federal Reserve, which has been considering creating a cash-backed cryptocurrency for several years. The administration says it sees several benefits in creating a US CBDC, including greater inclusion in the financial system (as it could potentially help the unbanked move money) and easier cross-border payments. It is one of the so-called "stablecoins", which has been tested by major financial institutions such as JP Morgan and Wells Fargo; it has the same portability as more typical cryptocurrencies like Bitcoin and Dogecoin, but is indexed to the value of real money. , instead of being subject to wild price changes.
Another proposal asks various agencies to provide an in-depth investigation into the effects of new regulations designed to limit the use of cryptocurrencies for illicit purposes, as well as the potential effects on financial markets, competition policy, and cybersecurity.
In a statement, Treasury Secretary Janet Yellen, whose department will be key to much of the progress expected in the executive order, welcomed the new policies.
"This approach will support responsible innovation that could result in substantial benefits to the nation, consumers and businesses," he said.
The US Is Falling Behind in Cryptocurrency Regulation
Overall, the order represents a long-awaited change and one that could help bring the U.S. crypto regulatory regime more in line with European efforts, according to Martha Bennett, vice president and principal analyst at Forrester Research.
“The United States is quite behind in thinking about how to address this. The EU, for example, is about to pass legislation on crypto assets,” he said. . "It's long overdue, both from a stability and consumer protection perspective."
Crypto regulation in the United States has suffered, according to Bennett, from a lack of centralization: the IRS treats digital assets as taxable property, while the SEC treats them like securities, for example.
"More clarity will go a long way, and what I've read between the lines in this order is really an encouragement for different regulators to work together, because it's been confusing," he said.
Furthermore, the arrival of a US-backed stablecoin could benefit both consumers and businesses, providing them with a new and simplified system for payments and remittances.
"In the United States in particular, the two internal payment systems are terribly out of date, and globally, they are absolutely from the stone age," Bennett said.
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