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Joe Biden Signed an Executive Order on Cryptocurrencies, This is What You Should Know.

United States President Joe Biden has signed an executive order on March 9, 2022 providing a pathway for the US government to examine the benefits and risks of digital assets such as cryptocurrencies. The framework on the executive order has been under construction for some time, but the rollout of the order comes amongst recent reports of Russia and others possibly eluding sanctions by using cryptocurrencies.

White House Tweet on Crypto Executive Order

There has been recent speculation that there would be regulations announced, causing anxiety for crypto investors and enthusiasts. Since the details of the order have been released the overall sentiment in the community seems to be very positive so far. Many experts report that smart regulations in the future would help with crypto adoption and allow a pathway for skittish investors concerned about a crypto crackdown to come into the space for the first time. The crypto markets have responded well with Bitcoin (BTC) and Ethereum (ETH) rising in price 11 and 8% respectively after the news, with some analysts calling for a new crypto bull market.

Joe Biden Crypto Executive Bitcoin Order
Joe Biden

The Biden Administration’s Crypto Executive Orders key components:

The order states that it will focus on 6 areas specifically

  • Illicit Activity
  • Consumer and Investor Protection
  • U.S. Competitiveness on the Global Stage
  • Financial Inclusion
  • Responsible Innovation
  • Financial Stability

Protecting Consumers

Protecting both investors and consumers of crypto is a major part of the directive. There have been many reports of investors falling victim to scams and losing large amounts of money. There have also been several prominent crypto exchanges which have experienced hacks causing users to lose their digital assets. The Biden administration is calling on the Treasure and regulators to “ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.”

U.S. Competitiveness in Crypto

Some of the messaging in the directive speaks to the U.S. wanting to create an environment where it has a competitive edge against other nations for crypto innovation and development. Many of the top names and companies in crypto have called for such actions from the U.S. government for some time, including Coinbase, the Winklevoss twins (Gemini exchange) and others. The Blockchain Association, a group that represents many crypto companies stated that Joe Biden “has the opportunity to ensure America remains the global leader for technological innovation for years to come.” Bitcoin whale and Co-founder of MicroStrategy also tweeted “The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier.”

Illicit Activity

There has been a negative stigma unfortunately attached to cryptocurrencies for some people over the past few years due to occassional reports of illicit activities using crypto to evade detection. The most recent reports come as some speculate that Russia may use the technology to evade sanctions. Over the past several years, many famous hacks have used crypto to hide ransom payments as well. The directive looks to research and detect what can be done to avoid illicit activities within the space.

What are StableCoins and will they be regulated?

Missing from Wednesdays executive order was any discussion of stablecoins which surprised some experts. Stablecoins are digital tokens that are meant to have their price exactly pegged to the current value of the U.S. Dollar making it easy to use them as a currency. Tether is currently the largest stablecoin with over $80 billion of the token in circulation. It claims to be backed by US Dollars however skeptics argue that is not fully true. Stablecoins are commonly used as an on and off ramp into purchasing or selling other cryptocurrencies. SEC Chairman Gary Gensler recently stated “Like other digital assets, stablecoins need to be monitored to make sure they aren’t bankrolling criminal activities”

United States considering a US Central Bank Digital Currency (CBDC)

In the directive the prospects of a possible CBDC for the United States was raised. At this time over 100 countries including the European Union are also investigating CBDCs. The directive states “The Order directs the US Government to assess the technological infrastructure and capacity needs for a potential US CBDC in a manner that protects Americans’ interests. The order also encourages the Federal Reserve to continue its research, development, and assessment efforts for a US CBDC.”

United States America CBDC digital US Dollar cryptocurency
United States considering Digital Dollar

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