Biden Preparing Executive Order on Cryptocurrencies

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Biden Preparing Executive Order on Cryptocurrencies

The Biden administration is apparently developing an executive order on cryptocurrency, which might be issued as early as February 2022. Various government agencies are analyzing the dangers and possibilities provided by digital currencies in preparation, and top administration officials have attended a series of talks on the subject, according to sources.

The presidential order was announced a day after the Federal Reserve Board (FRB) issued a discussion paper that examines the benefits and drawbacks of adopting a central bank digital currency (CBDC) for the United States and wants public feedback through May 20, 2022. The White House seems to want to grab the initiative, playing a key role in determining US government policy on cryptocurrencies.

Key Takeaways

  • According to reports, the Biden administration is considering an executive order on cryptocurrency.
  • The order’s primary purpose is to build a coordinated policy response from all federal agencies and departments in the United States.
  • Another objective is to keep the United States in the forefront of the global economy.
  • The decree might be issued as soon as February 20, 2022.
  • The directive was announced a day after the Fed published a paper on the benefits and drawbacks of developing a digital currency issued by the US central bank (CBDC).

Political Imperative

For some years, federal agencies have apparently been researching digital currencies and potential legislative and regulatory responses to them, but not in a cohesive and coordinated manner. Meanwhile, players in the expanding bitcoin sector have been frustrated by this fragmented approach and the resulting lack of clarity regarding the general direction of US policy. Furthermore, some experts are worried that other large governments’ choices to issue CBDCs may jeopardize the US dollar’s supremacy in the global economy.

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The Office of the Comptroller of the Currency (OCC), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) are among the federal regulatory bodies in the United States that have issued guidance letters, issued informal statements, or engaged the public in rule-making efforts regarding how the emerging crypto industry should comply with federal laws and regulations. However, thus far, these efforts have not been coordinated.

What the Executive Order May Contain

The executive order, which is apparently in the works, would address the economic, regulatory, and national security issues raised by cryptocurrencies. According to insiders, it will also make a request for reports from several government departments in the second half of 2022.

The Financial Stability Oversight Council (FSOC), whose continuous mission is to assess threats to the US financial system, is set to provide a crucial report. Another critical study is likely to look into the dangers of using bitcoins to aid different illicit operations.

Meanwhile, the presidential order is likely to give specific tasks to a wide range of government departments and agencies in crafting a comprehensive digital asset strategy for the United States. These departments and agencies vary from the United States Department of State to the United States Department of Commerce (DOC).One essential goal will be to keep the United States competitive in the face of the increasing increase of digital assets across the globe.

The presidential order is also likely to address the feasibility of issuing a CBDC in the United States. However, it is unlikely to take a hard stance until the Fed investigates this topic further. As previously stated, the Fed’s research paper, which was posted on January 20, 2022, asks the public to make views until May 20, 2022. Processing and responding to these comments will most likely take many months more.

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