The long-awaited executive order on crypto by President Joe Biden is here. In an unprecedented move for a US president, Joe Biden has signed his 82nd executive order since taking office in January 2021, expressly addressing a legal framework for digital assets.
While the executive order is the first big move to pull the government together behind crypto regulation, it isn’t the full-fledged crackdown that some had expected from a White House that had spent months warning about imminent regulation. In fact, many crypto enthusiasts are ecstatic about the new order, and the price of bitcoin is rising as a result.
Biden Seeks To Revolutionize Digital Currency
The White House said President Biden’s executive order ordered federal departments to investigate the possibility of a US central bank digital currency, as well as coordinate and consolidate policies on a national framework for crypto, in a statement released on Wednesday. Many news agencies stated that President Trump had planned to sign the executive order in February, but that it had been postponed due to Russia’s military actions in Ukraine.
On Wednesday, Bitcoin surged by as much as 11%. Ethereum, the second-largest token, increased by more than 8%, while so-called altcoins also increased in value. Other risk assets, such as stocks, have been under pressure as a result of the consequences from Russia’s invasion of Ukraine.
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Many industry leaders linked the executive order to a regulatory opportunity, noting that Biden had rarely mentioned crypto and blockchain throughout his presidency. According to reports, the possibility of Russia adopting digital money to avoid US sanctions may have influenced Trump’s decision not to wait any longer.
Biden said in the order:
“We must reinforce United States leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovations and digital assets. Continued United States leadership in the global financial system will sustain United States financial power and promote United States economic interests.”
Here Is What Industry Leaders Are Saying
The action drew immediate responses from lawmakers and industry leaders. Treasury Secretary Janet Yellen, who may have spoken too soon on the subject, said the executive order might “result in substantial benefits for the nation, consumers, and businesses” by encouraging innovation while managing industry risk.
Biden’s executive order aims to modernize US financial regulations to include cryptocurrencies, specifically by asking government agencies to research cryptocurrency and suggest new restrictions. The Treasury Department will devise strategies to protect investors and consumers from the financial risks associated with cryptocurrency, which is more volatile than conventional assets.
Here’s what else industry participants are saying:
The executive order, according to the Crypto Council for Innovation, which was founded in April 2021 and includes major exchanges like Coinbase and Gemini, takes a “holistic and informed” approach to cryptocurrency. It would most likely lead to regulatory clarity, responsible financial innovation, and a more inclusive economy, according to the organization.
For crypto firms, Biden’s order offer advantages that outweigh the disadvantages. The founder of the bitcoin exchange FTX, Sam Bankman-Fried, described Biden’s stance as “constructive.” He added:
“We applaud the Biden administration for recognising the growing importance of the digital-asset space and believe today’s executive order is a significant step forward in building a strong regulated environment in the US. Innovation will always need to be coupled with safeguards and protections.
The order was “a step in the right direction,” according to Kathryn Haun, a former Andreessen Horowitz general partner who sits on the boards of Coinbase and the NFT platform OpenSea.
Brad Garlinghouse, CEO of financial technology company Ripple Labs:
“Like many of you, I thought the Biden Admin’s EO would acknowledge crypto, but not detail specifics on next steps for regulation. However, I was pleasantly surprised & inspired by the EO acknowledging the *need* for evolution and alignment of the govt’s approach to crypto.”
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Trenchev of Nexo:
“Although President Biden’s executive order leaves us short of clarity on the regulatory pathway, it’s clear his administration believes that staying out of crypto will be to the nation’s detriment, akin to missing out on building out the infrastructure of the internet in the early 1990s. The US doesn’t want to be left behind as other countries look at ways to oversee the crypto industry.”
This enthusiastic response is understandable. Many crypto proponents were concerned that the White House would try to stifle the industry, and Biden hasn’t talked much about it.
Nonetheless, this attempt indicates that Biden considers cryptocurrency to be a substantial part of the US economy, with some promise. Because the government intends to develop its new regulations over time, the White House is also allowing a growing number of crypto-focused advocacy organizations and lobbying groups in Washington to try to influence how the new rules are implemented.
BTC/USD trades at $41k following signing of executive order. Source: TradingView
Biden’s more accommodating position on cryptocurrency hasn’t gone over well with everyone. Some argue that the government should not be involved in crypto regulation at all, and that Biden may still stifle the technology. Critics who think the crypto business is replete with fraud, scams, and criminal activities, on the other hand, argue for stricter cryptocurrency controls rather than wider acceptance.
Jeremy Allaire, co-founder and CEO of Circle, a cryptocurrency payments company, noted:
“For those of us in the crypto community, IMHO this E.O. should be viewed as the single biggest opportunity to engage with policy makers on the issues that matters. The proverbial doors of policymakers are WIDE OPEN, this is now a NATIONAL conversation in the U.S.”
Featured image from Getty Images, chart from Tradingview.com