By Natalie Mojica
President Joe Biden signed an executive order on March 9 calling on the government to extensively examine the risks and benefits of cryptocurrencies. A direct response from the administration to the crypto industry has been highly anticipated, especially given the growing regulatory concerns surrounding the crypto market.
The order calls on federal agencies to be uniform in their approach to regulating and providing oversight of digital assets. The White House’ fact sheet specified that “the Executive Order calls for measures to protect U.S. Consumers, Investors, and Businesses by directing the Department of the Treasury and other agency partners to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth.”
The order focuses on six areas: consumer protection, financial stability, illicit activity, U.S. competitiveness, financial inclusion, and responsible innovation. Along with the order, the White House announced that the Biden administration is exploring a digital version of the dollar.
Stories of investors falling for crypto scams or losing money through cyberattacks were the primary motivation for the Biden administration’s call on the Treasury to assess and develop policy recommendations that “safeguard against any systemic financial risks posed by digital assets.”
Another aspect of the executive order targets illegal activity in the crypto market. President Biden is adamant about the need for international collaboration on this issue and coordinated action to prevent events like the 2016 Bitfinex hack. Last month, the Justice Department announced it seized more than $3.6 billion in stolen bitcoin linked to the hack.
President Biden also addressed the environmental impact of the crypto market. The large energy cost accompanying digital currencies is an important aspect of regulation. Biden’s administration will study ways to reduce the negative climate impact of crypto innovation.
The U.S. is also focused on being a competitive force in the developing crypto world, even more now that China’s central bank announced all cryptocurrency-related activities are illegal. The Department of Commerce has been directed to “{establish] a framework to drive U.S. competitiveness and leadership in, and leveraging of digital asset technologies.”
As technology advances and the global market explores digital currencies, the Biden administration urged the government to lead the charge on researching the development of a potential U.S. digital dollar. The central bank has released a report detailing the pros and cons of virtual money but hasn’t officially decided whether the U.S. should issue it.
