United States President Joe Biden is reportedly about to introduce and sign an executive order designed to enhance the US government’s oversight of the cryptocurrency market. According to early reporting the order will order specific agencies of the federal government to study digital currencies in order to set potential regulations or policies at a later time.
The executive order is likely to be signed later this week and will likely provide a guideline on how to incorporate potential regulations on cryptocurrencies for agencies like the Treasury Department as well as other government agencies. In an Associated Press report, two sources were cited that said the framework for this order was put together well before the Russian invasion of Ukraine, however the administration has some concerns regarding Russia possibly using digital currencies to circumvent sanctions applied since the invasion two weeks ago.
Currently there is no individual government regulatory agency that is solely responsible for overseeing the cryptocurrency market which has exploded in popularity over the past several years to an overall market cap of over $3 trillion dollars. The crypto market has recently declined to a market cap of over $1.7 trillion as of Tuesday March 8th, 2022 after pullbacks in prices for Bitcoin (BTC), Ethereum (ETH) and other popular currencies. Bitcoin is currently sitting at $38,700 at the time of this article, while Ethereum sits at $2,580.
Will the United States Create a Central Bank Digital Currency (CBDC)?
In addition to the upcoming executive order detailing studies and potential regulations on cryptocurrency, there are reports that it may also announce that the US may be researching the prospect of creating it’s own CBDC or digital currency, backed the federal reserve. The reporting seems to conclude that the Biden administration will not provide a final decision for a potential Central Bank Digital Currency (CBDC) at this time. In late February the European Union’s finance chief Mairead McGuinness had stated that a legislative bill to introduce a digital euro will be presented to the European parliament in early 2023. The European Central Bank or ECB is currently experimenting with digital currencies to assist in the creation of a potential digital euro.
Unrelated to the ECBs work towards a digital Euro, Ripple (XRP) has recently partnered with the ‘Digital Euro Association’ to share technical knowledge for a European CBDC as well. Ripple (XRP) has previously assisted with expertise for possible CBDCs in the U.K., Bhutan and other nations.
James Wallis, who is Ripple (XRP)s VP of Central Bank Engagements recently stated that Ripple has “invested significantly in the CBDC world” and that it has 40 members working on CBDCs around the world. He added that the partnership will “further develop [Ripple’s] work in the CBDC area.”