The Biden White House on Wednesday introduced a new executive order regarding the regulation of cryptocurrencies. The order essentially lays out a comprehensive strategy for how the government plans to balance consumer protection while ensuring that the United States continues to be a space for innovation in the sector.
For those in the crypto sector concerned about aggressive government intervention, the language of the order seems to indicate that the Biden White House is not interested in sweeping reforms in the short term and is instead simply focused on ensuring that agencies are on the same page in researching and observing the implications of the crypto industry on national security.
“The rise of digital assets creates an opportunity to strengthen American leadership in the global financial system and at the technology frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk” , said a fact sheet issued by the White House reads.
The press release sets out seven major objectives of the executive order with additional details.
- Protecting American Consumers, Investors and Businesses
- Protect U.S. and Global Financial Stability and Mitigate Systemic Risk
- Mitigate the illicit finance and national security risks posed by the illicit use of digital assets
- Promote U.S. leadership in technology and economic competitiveness to strengthen U.S. leadership in the global financial system
- Promoting equitable access to safe and affordable financial services
- Support technological advances and ensure responsible development and use of digital assets
- Explore a US Central Bank (CBDC) Digital Currency
While crypto investors may generally breathe a sigh of relief, other lawmakers like Elizabeth Warren, who have been highly critical of the crypto space, may be less pleased. In recent months, Warren has been critical of the industry, drawing particular attention to the environmental impacts or cryptocurrencies and investor risks associated with lax regulation of so-called stablecoin issuers and other cryptocurrency players. DeFi ecosystem.
White House communications regarding EO seem to largely avoid calling out particular coins or projects, with the exception of Bitcoin’s price volatility in particular. There was no mention of particular verticals like DeFi or NFT either.
A particular concern among some in the crypto industry was that the potential use of cryptocurrencies by Russia’s wealthy elite to evade sanctions would lead to a crackdown, but an anonymous senior official from a background press call seemed to downplay that possibility, “I’ll say, about Russia, in particular, the use of cryptocurrency which we don’t think is a viable workaround to the set of financial sanctions we’ve imposed on the whole of the Russian economy and, in particular, to its central bank.
One of the main purposes of the order is to formally request several government agencies to begin researching the development of a state-backed cryptocurrency – a US Central Bank Digital Currency (CBDC). “This research, along with the framework we will develop for international engagement and competitiveness, will help ensure that we preserve the essential role of the United States in the global financial system,” a senior White House official said.
President Biden will sign the executive order today, the White House announced.