TL;DR Breakdown
- President Joe Biden’s cryptocurrency executive order gets a positive reaction from the community
- Biden’s executive order is focused on improving financial regulatory standards
After months of speculation, US President Joe Biden’s long-awaited executive order on cryptocurrency has arrived. While the order is the first substantial attempt to bring the government together around crypto regulation, it isn’t quite as severe as many had anticipated from an administration that has spent months warning about impending oversight. In fact, a lot of people in cryptocurrency are very happy about the order.
Joe Bidens orders federal agencies to investigate the problems that crypto encountered as it became more mainstream including its roles in money laundering and terrorism and how best to regulate crypto, and also establish a definition for what exactly constitutes cryptocurrency. This latter point is seen as crucial by many in the crypto community, who want to ensure that their tokens and coins are not subject to overregulation. The definition in the order is broad, stating that cryptocurrency is a digital representation of value that can be transferred, stored, or traded electronically.
Biden’s executive order is focused on improving financial regulatory standards to conform to cryptocurrency, particularly by requiring government agencies to research and propose new rules for cryptocurrencies. The Treasury Department will develop suggestions for measures that may protect investors and consumers from crypto-related financial hazards, which might be more volatile than other forms of property.
On March 9, Treasury Secretary Janet Yellen praised the project, remarking that it would collaborate with other state departments to promote innovation and reduce risks. From an Administration that has grown increasingly hostile towards the industry in recent monthsThe order has also drawn the ire of Minnesota’s own Democratic senator. Pro-crypto Republican Senator Tom Emmer has also aired his comments, stressing the need for the United States to devise a plan to encourage innovation.
Commenting on the development, Gemini co-founder Cameron Winklevoss said the “executive order on crypto is a watershed moment. It paves the way for thoughtful national crypto regulation that will allow builders to build onshore and ensure that the US remains a leader in crypto — creating greater independence, choice, and opportunity for all.”
Government to encourage technological advancement through cryptocurrency
The order also directs the government to encourage technological advancements that would promote the use of crypto and digital assets while taking privacy and security concerns into account. Biden even suggested that the government should continue studying a proposal to launch its own digital currency.
It’s unclear how this unusual but controversial plan would work, but it involves a government-issued digital currency that is linked to the US dollar and is referred to as the digital dollar. While a digital dollar wouldn’t be as volatile as bitcoin, using it would likely entail similar processes: A government-backed digital coin, like crypto, would most likely
This definition is being seen as a victory by many in the crypto community, who were worried that the government would try to apply traditional financial definitions to their tokens. This could have resulted in heavy-handed regulation that would have stifled innovation in the sector. By giving cryptocurrencies their own definition, the government is signaling that it plans to treat them differently from traditional financial products.
Some people are not pleased with Biden’s more welcoming attitude towards crypto. Some believe the government should not be involved in regulating cryptocurrencies at all, and that Biden may still inhibit the technology. Critics who argue that the cryptocurrency industry is filled with fraud, schemes, and criminal activity want tighter regulations on cryptocurrency rather than wider acceptance.
