Last Wednesday, President Joe Biden signed a cryptocurrency executive order. The order looked into regulating cryptocurrencies. It also looked into the possibility of a digital dollar. The EO was a long-awaited directive on how to govern and regulate digital assets.
Historic Cryptocurrency Executive Order
Reports said that the delay in issuing US policy on cryptocurrencies and a digital dollar was due to internal disagreements. White House officials reportedly clashed views with Treasury Secretary Janet Yellen. This led to delays in finalizing and issuing the official government policy rollout.
Earlier, the digital asset markets got an advance copy of the cryptocurrency executive order. The Treasury department accidentally put out a statement ahead of Biden’s announcement. The now-deleted statement is called the EO historic.
Cryptocurrency Executive Order Finally Signed Last Wednesday
Biden finally signed the cryptocurrency executive order. Per the White House fact sheet, the EO called on federal agencies to take a unified approach to regulation and oversight. One major part of the directive involves protecting consumers. The government said that there were too many stories of citizens falling for crypto scams. Consequently, the White House called on the Treasury Department to assess and develop policy recommendations on cryptocurrency. Regulators should “ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.”
Cryptocurrency Executive Order Also Mentions Possibility of Digital Dollar
The US government also finally admitted to wanting to explore a digital dollar. China led the charge in the issuance of a central bank digital currency (CBDC). Now, many Chinese citizens are using smartphones to make payments and handle their finances. However, Biden didn’t exactly say that the US will launch its own digital dollar. Instead, he called on the government to prioritize the research and development of a potential US CBDC.
Prior to the EO, the Federal Reserve already started its research on a potential digital currency. The US central bank released a massive report listing the pros and cons of having a virtual currency. However, it did not take a specific position on whether the US should adopt one. The report did admit that CBDCs can speed up payment processing. But, policymakers still need to evaluate a number of concerns about privacy and stability.
Concerns Over Crypto Trading
Also, the Biden cryptocurrency executive order wants the US to root out illegal activities tied up with crypto trading. Biden called for yet another unprecedented focus of coordinated action from federal agencies. He wants the government to mitigate illegal financial transactions and plug national security risks from cryptocurrencies. This includes encouraging international cooperation on the matter.
Last month, the US government seized around $3.6 billion worth of bitcoin-related to the Bitfinex hack in 2016. This is the government’s largest seizure of cryptocurrencies ever. With Russia’s invasion of Ukraine, governments are also raising concerns about the possible use of crypto to circumvent sanctions. However, proponents insist that crypto actually makes it more difficult to launder money. All cryptocurrency transactions remain on public display via an unchangeable record-keeping system. This system is more known as the blockchain.
Watch the Associated Press video reporting that US President Joe Biden signs executive order on cryptocurrency
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