Biden’s Crypto Executive Order
By Dawdu M. Amantanah
U.S. President Joe Biden signed the Executive Order on Ensuring Responsible Development of Digital Assets, March 9th, 2022, which gives reach to the government to examine the risks and rewards of cryptocurrencies. This may be the one order that finally opens the doors to cryptocurrency regulation.
This has caused some good and bad tension in the crypto market. People awaited Biden to move on to cryptocurrency for regulation with additional enhanced pressure from China’s CBDCs and Russian sanction avoidance. The lag from SEC’s Gary Gensler on crypto regulatory clarity made the situation seem at a standstill.
To my understanding, Biden had to face the inevitable due to the explosive growth of cryptocurrencies in recent years. The market cap of all crypto globally is in the ballpark of $3 Trillion, so regulation had to be put in place, and digital assets like bitcoin no longer could be ignored.
The pressure was something I always knew would arise in the face of adopting something new like digital currency. People in recent years are becoming aware of inflation and now purchase crypto at a rapacious rate according to the exchanges like Coinbase and Kraken. “Surveys suggest that around 16 percent of adult Americans — approximately 40 million people — have invested in, traded, or used cryptocurrencies.”
Joe Biden has realized America is behind on how to handle the thousands of cryptocurrencies, and playing whack a mole with a few like Ripple’s XRP requires a much more giant mallet. This is an opportunity to allow the United States to maintain technological leadership in this rapidly growing space. And find an efficient process to mitigate the risks for consumers, businesses, the broader financial system, and recoup tax revenue.
Specifically, the Executive Order calls for changes to measures which Biden is ready to put in place. I will break down each to give the audience a better understanding of what government oversight of crypto will entail, according to the White House website. Anytime the government gains the attention of something, be aware many changes will be coming to the crypto space. Still, on a good note, anyone that is interested or currently working in this space will see an influx of jobs and opportunities that guard against risks and guide responsible innovation.
Protect U.S. Consumers, Investors, and Businesses
Department of the Treasury and other agency partners to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth. The Order also encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.
Protect the U.S. and Global Financial Stability and Mitigate Systemic Risk
Encouraging the Financial Stability Oversight Council to identify and mitigate economy-wide (i.e., systemic) financial risks posed by digital assets and to develop appropriate policy recommendations to address any regulatory gaps.
Mitigate the Illicit Finance and National Security Risks Posed
Illicit Use of Digital Assets by directing an unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks. It also requires agencies to work with our allies and partners to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks.
Promote U.S. Leadership in Technology and Economic Competitiveness
Reinforce U.S. Leadership in the Global Financial System by directing the Department of Commerce to work across the U.S. Government in establishing a framework to drive U.S. competitiveness and leadership in and leveraging of digital asset technologies. This framework will serve as a foundation for agencies and integrate this as a priority into their policy, research and development, and operational approaches to digital assets.
Promote Equitable Access to Safe and Affordable Financial Services
Affirming the critical need for safe, affordable, and accessible financial services as a U.S. national interest that must inform our approach to digital asset innovation, including disparate impact risk. Such secure access is vital for communities with insufficient access to financial services. The Secretary of the Treasury, working with all relevant agencies, will produce a report on the future of money and payment systems to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.
Support Technological Advances and Ensure Responsible Development and Use of Digital Assets
Directing the U.S. Government to take concrete steps to study and support technological advances in the responsible development, design, and implementation of digital asset systems while prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.
Explore a U.S. Central Bank Digital Currency (CBDC)
Placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest. The Order directs the U.S. Government to assess the technological infrastructure and capacity needs for a potential U.S. CBDC in a manner that protects Americans’ interests. The Order also encourages the Federal Reserve to continue its research, development, and assessment efforts for a U.S. CBDC, including developing a plan for broader U.S. Government action in support of their work. This effort prioritizes U.S. participation in multi-country experimentation and ensures U.S. leadership internationally to promote CBDC development consistent with U.S. priorities and democratic values.
In conclusion, the scary part is governments will control what CBDCs can buy individually, let’s say two pounds of meat per month, due to climate change risk. Social credit plus carbon footprint for every single person could become a reality. Privacy risk will increase and money will not be like it is today because cash is anonymous where as a digital dollar is public on the blockchain ledger.
Bitcoin and gold will remain the only value alternative and cash equivalent as we have it today, and bitcoin is that new money with no overlord. As governments learn how to control digital assets while massively overspending fractional fiat money, things could get very dystopian without an option as bitcoin achieves. Not saying any of this will come to fruition but it is worth paying attention to when lobbying for policy in the future.
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About The Author
Dawdu M. Amantanah is a technical writer and contributing editor for Bitcoin Magazine , BlackBitcoinBillionaire and Senior Editor for Satoshi’s Journal. He is passionate about cryptocurrency, economics, radical entrepreneurship, and whatever else he finds attractive at the time.