President Biden has signed an Executive Order titled “Ensuring Responsible Development of Digital Assets” yesterday, March 9, which calls on federal agencies to explore and create a unified policy regarding digital assets, including cryptocurrencies. According to the press release by the White House:
“The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”
This Executive Order comes on the heels of similar attempts by state legislators and the New York Stock Exchange to fully legitimize cryptocurrency. However, the Order is more encompassing and is the first step in setting up the infrastructure necessary for regulating and adopting crypto in full.
Here are the main takeaways from President Biden’s Executive Order on cryptocurrency.
The Order directs federal agencies to take a unified approach and create strategies that will enable the U.S. to take a leadership role in digital asset technologies.
“The United States has an interest in ensuring that it remains at the forefront of responsible development and design of digital assets and the technology that underpins new forms of payments and capital flows in the international financial system . . .,” part of the Order reads.
The Order also directs the Government to explore the possibility of launching a U.S. Central Bank Digital Currency (CBDC):
“These efforts should include . . . and the actions required to launch a United States CBDC if doing so is deemed to be in the national interest.”
Further, the Secretary of Treasury, in consultation with other agencies, is directed to submit a comprehensive report within 180 days of the issuance of the Order on the feasibility and the implications of a U.S. CBDC.
The report also needs to assess the threats of foreign CBDCs to U.S. financial and national security:
“. . . shall submit to the president a report on . . . (v) the extent to which foreign CBDCs could displace existing currencies and alter the payment system in ways that could undermine United States financial centrality; (vi) the potential implications for national security and financial crime . . .”
The Order further directs federal agencies to assess the risk digital assets pose to U.S. residents.
“One section of the report shall address the conditions that would drive mass adoption of different types of digital assets and the risks and opportunities such growth might present to United States consumers, investors, and businesses.”
Finally, it calls on these agencies to recommend actions, including proposing regulation and legislation, to protect consumers, investors, and businesses.
In total, the Executive Order is a comprehensive set of proposals that directs U.S. federal agencies to work in cohesion to fully investigate the potential impact of crypto and how it can be utilized and regulated. You can find the verbatim text of the order here.
In addition, the price of Bitcoin rose almost 9% overnight before the order was signed, as the Treasury released a now-deleted statement leaking some of the details ahead of time, demonstrating the positive stance the Biden Administration is taking regarding cryptocurrencies.
Considering the actions of state legislators and the largest stock exchange in the world, combined with the new approach by the Federal Government, the future of crypto is clear – it will become mainstream and regulated, for better or for worse.
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