Biden’s Executive Order on Crypto Regulations
Ever since President Biden signed the executive order on ensuring responsible development of digital assets on March 9, everyone is speculating different possibilities and outcomes and what it could mean for the future of cryptocurrency and blockchain technology.
Although we’ll talk about some highlights, we’ll not repeat everything the executive order says. If you want to read all of it, you can read it here.
What is Biden’s Executive Order Anyway?
There’s a lot of confusion surrounding the executive order, but one thing that’s for sure is that the government isn’t imposing any new rules or regulatory framework just yet.
Instead, the executive order directs different government agencies and officials to research and report back suggestions and recommendations for new and effective policies.
The government recognizes and acknowledges the fact that cryptocurrency and digital assets have officially entered the mainstream. But unlike past administrations that were quite pessimistic and dismissive about cryptocurrency and blockchain, Biden seems to take a more optimistic and inclusive approach.
Along with the official executive order, the administration also released a FACT SHEET, which says that the government wants to embrace this new wave and wants to incorporate it without destabilizing the economy or destroying the environment.
At the same time, they also want to maintain leadership in the engagement and governance of digital assets on a global scale while using them to drive their economy further.
What is the Purpose of Biden’s Executive Order?
The executive order aims to harness the potential of digital assets and the underlying blockchain technology in an effort to support innovation while also mitigating potential risks and threats towards the financial system, economy and the climate at large.
To be more specific, these are the six priority goals that the executive order aims to achieve –
- Protecting customers, investors and businesses.
- Protecting financial stability and mitigating systematic risks.
- Protecting finance and national security by preventing illicit use.
- Reinforcing US leadership in the technology and global financial system.
- Promotion financial inclusion and use of digital assets.
- Exploring the US digital dollar.
These are the six primary goals that define the purpose of Biden’s executive order on responsible innovation of digital assets.
Is this the Next Step in Implementing Digital Dollar?
Out of those six goals laid out in the executive order, one that stands out the most and is the most interesting is the one talking about CBDC (Central Bank Digital Currency).
Earlier this January, we saw the Federal Reserve toying with the possibility of a US digital dollar. We mentioned it as one of the contributing factors for Bitcoin’s massive dip at that time.
The executive order directs the Federal Reserve to prioritize the research and development of a possible CBDC in the US. It also asks the Federal Reserve to assess what hurdles they could face, what kinds of infrastructure they would need and how to carry it out in the most efficient way.
Just a year or two ago, no one really took the idea of a CBDC that seriously. But now, it seems a matter of when rather than if.
What Does it Mean for the Future of Cryptocurrency?
As we said before, there’s nothing there in the order that concerns us right now.
All government agencies and officials have 180 days to report back their findings, which means we probably won’t see any significant changes in crypto policies for the next six months.
However, as of now, the government acknowledging cryptocurrency as a part of the mainstream economy is a huge deal. Not only that but the fact that the government doesn’t see blockchain as something whose use is only limited to digital assets and finance says a lot.
It shows that the government finally understands the potential of the technology beyond just cryptocurrency and digital assets.