Biden signs executive order on crypto, considers digital dollar

10 Mar 2022

Image: © memorystockphoto/Stock.adobe.com

The order has been seen as good news by crypto investors and the price of bitcoin surged after the announcement.

US president Joe Biden signed an executive order yesterday (9 March) that sets out a comprehensive plan for crypto and digital assets in the country, including the potential for a US central bank digital currency.

The order requires government agencies such as the US Treasury and Department of Commerce to prepare reports on the risks and benefits of digital assets across six priorities: consumer protection, financial stability, illicit finance, economic competitiveness, financial inclusion and innovation.

Future Human

It also calls for prioritising research and development of a potential digital version of the dollar and assessing the technology required.

This follows in the footsteps of countries such as China, India and the EU, which have already started looking into national digital currencies. A bill to introduce a digital euro could be tabled in the EU early next year, EU finance chief Mairead McGuinness recently said.

The price of bitcoin surged immediately after the executive order was announced, as crypto investors saw the move as supportive of the industry.

Bitcoin investor Cameron Winklevoss described the executive order as a “watershed moment” that would pave the way for “thoughtful national crypto regulation”.

It comes days after reports that the US was cracking down on crypto, with the Biden administration asking exchanges to ensure individuals and organisations in Russia don’t use cryptocurrencies to sidestep economic sanctions.

US to play ‘leading role’ in crytpo

The White House said that the rise in digital assets “creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier”.

“But [digital assets] also have substantial implications for consumer protection, financial stability, national security and climate risk,” it wrote in a statement yesterday.

“President Biden will sign an executive order outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

The White House also said that the executive order aims to ensure that the US maintains “technological leadership in this rapidly growing space” and can play a “leading role in international engagement and global governance of digital assets”.

There is a strong focus on mitigating risks to consumers, investors and businesses in the executive order, as the US is looking at how it can regulate a nascent and unpredictable sector.

In a joint statement, US National Economic Council director Brian Deese and national security adviser Jake Sullivan said that an “American approach” to digital assets is one that encourages innovation but also protects consumers, financial stability and the environment.

“‘Financial innovation’ of the past has too often not benefited working families, while exacerbating inequality and increasing systemic financial risk. This history underscores the need to build robust consumer and economic protections into digital asset development,” they said.

US senator Elizabeth Warren said Biden is “right to spotlight crypto’s risks and we need strong rules before it’s too late”.

“I’ve been ringing the alarm bell on crypto, from consumer protection to the environment to national security – especially since Russian elites can use digital assets to undermine sanctions,” she tweeted.

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Vish Gain is a journalist with Silicon Republic

editorial@siliconrepublic.com