Biden administration releases long-awaited executive order on cryptocurrencies

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Biden administration releases long-awaited executive order on cryptocurrencies

On Wednesday, the Biden administration released its long-awaited executive order on cryptocurrencies, giving a broad roadmap of the government's plans to review and research digital currency across six areas: 1 consumer and investor protection, 3 illicit finance, 4 U.S. leadership in the global financial system and economic competitiveness, 5 financial inclusion and 6 responsible innovation.

The White House said that 16% of Americans, or almost 40 million citizens, now invest in or use cryptocurrencies, allowing the sector to boast a $3 trillion market cap last November. The Biden administration hopes to be at the forefront of global innovation on policies around digital assets, while protecting protections for consumers and preventing illicit financing for terrorism.

The White House said that the United States must maintain technological leadership in this rapidly growing space, to support innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate.

It will ask different agencies and departments of the government to create policy recommendations on cryptocurrencies and improve regulatory oversight to protect against systemic financial risks. It will ask the Financial Stability Oversight Council, created in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, to identify and reduce these risks by designing policy recommendations around cryptocurrencies regulations.

The whole of government approach will see coordinated action around virtual currencies, especially around the problems of systemic financial risks, terror financing, and anything deemed to be a national security risk.

U.S. Treasury Secretary Janet Yellen said that the approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses. It will address the risks associated with illegal finance, protecting consumers and investors, and preventing threats to the financial system and broader economy. Yellen s department has been tasked with developing a report on the future of money and payment systems, including the ability of cryptocurrencies to advance greater financial inclusion in the American economy.

The executive order would help the government promote U.S. global competitiveness overseas, and play a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, according to National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan. The White House said that more than 100 countries across the globe are already looking at CBDCs, which will allow the government to look at the viability of a digital dollar, or central bank digital currency, CBDC, and the associated technological infrastructure in a way that protects Americans interests.