The US government plans to carefully consider the benefits and risks of cryptocurrencies like Bitcoin following a new executive order from President Biden.
While the executive order has now been signed by President Biden, the cryptocurrency market took notice of it early on when the US Treasury accidentally released a statement calling the decision “historic” on the day before its publication. The now-deleted statement also included some of the details of the executive order up front, resulting in an 8% increase in the price of Bitcoin.
President Biden's latest executive order calls on federal agencies to take a unified approach to the regulation and supervision of digital assets. The White House provided more details in a press release about which areas will be prioritized going forward, saying:
“The Order defines a national policy for digital assets around six key priorities: consumer and investor protection; financial stability; illicit financing; United States leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
Whole-of-Government Approach to Crypto
One of the main areas that President Biden's executive order focuses on is protecting American consumers, investors, and businesses when it comes to investing in cryptocurrency due to the large number of cryptocurrency scams over the years.
The US government plans to do this by tasking the Treasury Department and other federal agencies with developing policy recommendations intended to address the implications of the cryptocurrency market and financial market changes. However, the executive order also encourages regulators to "protect against any systemic financial risk that digital assets pose."
As consumers have begun to invest in and use cryptocurrency, so have cybercriminals, which is why President Biden wants to mitigate the illicit financial and national security risks posed by digital assets. To do this, federal agencies will need to work together, although international collaboration is also required.
Since mining Bitcoin and other cryptocurrencies requires a lot of energy, President Biden also wants the US government to take a closer look at how to make the process more environmentally friendly. While the executive order does not mandate the creation of a digital dollar, it does suggest researching and developing a US central bank digital currency (CBDC) if it is in the best interest of the country.
While the sweeping regulation of cryptocurrency was not what many expected, new regulations could emerge as a result of President Biden's executive order once federal agencies have the opportunity to further investigate the six key priority areas laid out in the same.
via CNBC