Revisiting Joe Biden’s Executive Order & The Reshaping of American Cryptocurrency

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President Joe Biden issued the “Executive Order on Ensuring Responsible Development of Digital Assets” on March 9, 2022. Experts are describing the move as “extremely positive,” “long overdue,” and an “acknowledgment that cryptocurrency is here to stay.”

 

He asked for a comprehensive assessment of digital assets, including cryptocurrencies, citing the $3 trillion market worth of digital assets as of November 2021. A survey found upwards of 16% of American people have invested in, traded, or utilized cryptocurrencies. (Lopez-Kurt, Mora)

 

The Executive Order Sets Forth Six Main Objectives

 

  1. Consumer and investor protection;

  2. Financial stability;

  3. Mitigation of illicit finance and national security risks;

  4. US leadership in the global financial system and economic competitiveness;

  5. Financial inclusion; and

  6. Responsible innovation.

 

The Executive Order also asks for more profound research into a US Central Bank Digital Currency, making it the first comprehensive government-wide approach to the benefits and risks of digital assets. It also serves as official recognition of digital assets’ expanding influence and the federal government’s intention to control digital assets in general and cryptocurrencies. (Lopez-Kurt, Mora)

 

Although the Executive Order has no immediate consequences, it is dogged by the threat of federal investigations, regulation, and oversight, likely to have long-term implications for Bitcoin. Hopefully, the Executive Order should signify the federal government’s intention to take a consistent, structured, and intelligent approach to cryptocurrency. As a result, the federal government may finally provide advice and clarity to entrepreneurs and investors in cryptocurrency and other digital assets.

 

Experts React to Biden’s Executive Order:

 

“In the long-term, this is extremely positive for the crypto market and is necessary to allow it to grow further, mature, and be more accessible to institutional investors,” says Tal Elyashiv, founder of SPiCE VC. This venture capital fund focuses on blockchain and tokenization.

 

“It’s a step in the right direction that the White House is assessing digital assets from innovation and competitiveness. Data shows working, and middle-class Americans that have been locked out of the traditional financial system are leading mainstream adoption of blockchain and cryptocurrency. So we need this government strategy to prioritize greater federal investments in skills training and access to capital to ensure new female investors, Black and Latino entrepreneurs, startup founders, and small businesses in urban and rural communities are empowered to lead and thrive.” - Cleve Mesidor, public policy advisor at the Blockchain Association.

 

“The executive order sets out a game plan for the administration to more holistically consider what to do about digital assets. While many parts of the government were already at work on regulating aspects of crypto, the executive order brings it together. It provides insights into how the White House is thinking through the issue. The Treasury Department’s comments the previous day before the Financial Literacy and Education Commission demonstrate the administration’s commitment to increasing consumer understanding and I suspect, eventually increasing regulation for consumer protection for cryptocurrency. But that process takes time.” - Aaron Klein, senior fellow in economic studies at the Brookings Institution. 

 

“I think President Biden’s executive order on digital assets presents a thoughtful and comprehensive national approach to cryptocurrency regulation. This order is an acknowledgment that cryptocurrency is here to stay. I was encouraged by the focus on financial inclusion and expanding access to safe and affordable financial services. I hope this focus can continue to support the high cryptocurrency adoption levels among communities of color by addressing the millions of unbanked and underbanked families in this country.” - said Charlene Fadirepo, crypto expert and the founder of Guidefi.

 

“It’s a tremendous relief that they are taking a more measured approach and are generally open to digital assets as the cornerstone for the future financial system, instead of the naive view that it’s only something criminals use. The executive order triggered a huge run-up in the crypto markets: regulatory clarity on digital assets would be enormously helpful for the industry.” - Pat White, CEO of Bitwave.

 

Short term, the move may create some volatility in the crypto market, says Elyashiv. Bitcoin climbed up 9%, above $40,000, after the White House announced that Biden would sign an executive order on crypto. Ethereum’s price saw an immediate boost as well. (Gailey) 

 

What do you predict will come from this EO? Let us know in the comments!

 

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