- The Biden administration has issued and signed an executive order that will shape policies around cryptocurrency.
- The order means that various government agencies will file reports on crypto regulation over the coming months.
- The order extensively discusses the possibility of a central bank digital currency (CBDC), among other topics.
Order Will Create New Policies
Early today, President Joe Biden signed a long-anticipated executive order on cryptocurrency regulatory strategy. Titled “Executive Order on Ensuring Responsible Development of Digital Assets,” the document primarily requests research and new policy proposals for cryptocurrencies, digital assets, and blockchain or digital ledger technology from various government agencies.
It notes that crypto development largely exists “within the scope of existing domestic laws and regulations” but that “growing development and adoption as well inconsistent controls” require the creation of a coordinated government approach.
Some plans discussed in the order could put restrictions on cryptocurrency. The order says that the government aims to protect consumers, investors, and businesses, maintain financial stability, restrict illegal financing, and reduce national security risks.
Other policies appear to promote crypto development. The order says that the government intends to reinforce U.S. leadership, create safe and affordable financial services, and support technological advances in the area of digital assets and payments.
The order also touches on energy, recognizing the need to promote technologies that reduce “climate impacts and environmental pollution…from some cryptocurrency mining.”
Various reports will be produced in line with the goals outlined above over the next 90 to 210 days (3 to 7 months).
CBDCs Are Being Examined
The order additionally outlines a policy on central bank digital currencies or CBDCs. Such an asset would likely be backed by the U.S. dollar and issued by the central bank (i.e. the U.S. Federal Reserve System).
Though the executive order does not promise that the U.S. will create a CBDC, it says that the Biden administration puts the “highest urgency on research and development” of a CBDC. It adds that the administration will assess the actions needed to launch a CBDC “if doing so is deemed to be in the national interest.”
Furthermore, the order discusses global stablecoin efforts. The Biden administration says it “sees merit in showcasing United States leadership” in international CBDC conversations and pilot projects and says that it will engage with groups such as G7 and G20.
The order requests that various agencies submit reports concerning a United States CBDC within 180 to 210 days. The Federal Reserve previously published a CBDC report in January.
Various Agencies Are Involved
The order lists the government agencies and executives that will be involved in implementing policies. The Secretary of State and Secretary of the Treasury, alongside the Secretaries of Labor, Commerce, Energy, and Homeland Security will be involved. The United States Attorney General will be involved as well.
Directors, administrators, and chairs of various other agencies will also be involved, including heads of the Environmental Protection Agency and the National Science Foundation.
Financial agencies may attend meetings. The list of invited agencies includes but is not limited to the Federal Reserve, the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Crypto prices appear to have benefited from news of the order. The market’s entire capitalization is up 6.2% over the past 24 hours, while Bitcoin itself is up 8.3% over the same time period.