On Wednesday, the White House announced to actively regulate digital-asset transactions via a new cryptocurrency executive order (EO). This order was published on March 9.
This announcement might be an essential step in assisting cryptocurrencies in developing into a more lively market, even though regulation has a reputation for damaging economic activity in the past.
President Joe Biden has directed several federal departments to develop a strategy that handles digital assets’ dangers (and capitalizes on the potential advantages). While there are many details of the new cryptocurrency executive order (EO), the following are the primary objectives among the main components of the crypto EO for analyzing digital assets:
- Financial security
- Investor and consumer protection
- Inclusion of funds
- Leadership in the international financial system and economic competitiveness in the United States
- Illegal financing
- Responsible innovation
The administration aims to “reinforce American leadership in the global financial system and at the technology frontier while reducing risks to consumers, companies, the broader financial system, and the climate.”
Currently, the United States lacks a structure for the growth of cryptocurrencies, which may cause the country to lag further behind the digital-currency initiatives of other countries. Their federal govt has observed silence on cryptocurrencies.
Top cryptocurrencies like Ethereum (+6%) and Bitcoin (+9%) rose in response to the crypto executive order. However, their timing wasn’t great; the change in digital asset values occurred before the cryptocurrency executive order (EO). This change was due to the Treasury Department prematurely publishing a relevant statement from Janet Yellen, United States Secretary of the Treasury. The statement was then unpublished and posted again upon the executive order’s formal issuance.
The cryptocurrency industry has risen significantly recently, with the market approaching $3 trillion. However, volatility has hampered it as well. In early March, the market size fell to half. Moreover, there was also heightened concern about the asset’s future, given the federal government’s relatively hands-off policy.
There was minimal movement before the cryptocurrency executive order. The Infrastructure Investment and Jobs Act of 2021 included provisions for bitcoin transactions which many considered a forerunner to more extensive federal regulation and monitoring.
On the other hand, Biden’s new cryptocurrency executive order portrays that the U.S. government is a guardian of the innovation of digital assets. It also recognizes the requirement for investor and customer safeguards similar to what federal authorities presently offer for securities purchased and traded on the stock exchange.
