It’s been six months since President Joe Biden signed an executive order on crypto, and has been making waves in how the crypto industry operates in the US.
The crypto industry has been making huge strides, the United States has been notorious for lagging behind in how the law views how the industry is making progress.
For decades, the US has maintained its status as a huge force in determining how money operates around the globe. But there are still many unanswered questions about how the US will choose to regulate digital assets, and the industry remains anxious to see what will happen next.
Six months ago, US President Joe Biden signed an executive order that speaks about how the US “must maintain technological leadership in this rapidly growing space,” and would have to study the impact that crypto has on the American market.
The executive order was intended to set the stage for regulatory clarity for crypto within the US, and ordered various firms and government agencies to conduct investigations and research within the industry to progress the prospect of establishing further crypto laws.
Biden’s Executive Order, TL;DR’d
Biden’s Executive Order on crypto is focused on having government and federal agencies investigate the following:
- Risks to financial stability caused by private-owned cryptocurrencies
- Risks to US national security due to cryptocurrencies
- Criminal activity involving cryptocurrencies
- Environmental impacts of cryptocurrencies
- Crypto’s impacts on economic competitiveness
What’s notable about the Order?
At the time of publishing, Kristin Smith, executive director of the DC-based Blockchain Association said that the language is “very bullish” in comparison to the previous order from Trump’s Administration, citing that it “was much more hostile towards crypto.”
But there still remain many questions, despite it being much more kind to its previous incarnations. Strikingly, the bill does not specify who will be in charge of regulating crypto in the US.
Amongst those fighting for overseeing the US crypto industry include the US Securities and Exchange Commission (US SEC) and Commodity Futures Trading Commission (CFTC) – and no reasonable conclusions have been drawn even after 6 months of the order being published.
The US SEC has also been notably unfriendly to the crypto industry – and it is currently uncertain whether the US federal government would adopt policies to support blockchain development and technology.
Despite the lack of progress in terms of the law, if we take a closer look, we can notice how the US government, and its agencies, are seeing crypto, and how they may regulate it.
Who did what, so far?
So far, the White House and several executive branch departments have published their first sets of reports from their investigations into crypto.
Amongst these reports include the possibility of implementing a central bank digital currency (CBDC) in the form of a digital dollar (now in its preliminary research phase), and how criminals in crypto would face law enforcement.
While more reports are soon to be expected, ones worth watching out for include how the Federal Reserve would issue the digital dollar, and what regulatory gaps in crypto that lawmakers take notice of that still exist within crypto oversight.
As of writing, the respective US departments of Treasury, Commerce, and Justice, including the White House Office of Science and Technology Policy have published responses to President Biden’s order – examining what roles they may have in bolstering the US’s crypto industry.
Amongst the more progressive is the Commerce Department, where in its September report recommended engaging more with both private companies and international regulators “to promote development of digital asset policies … consistent with US values and standards.”
Amongst these developments include the support of educational initiatives, and to assist in developing a workforce.
The Treasury Department has published the most reports, and is in the midst of a request process for public opinion on concerns regarding illicit finance.
Although we can expect forms of responsible development to occur, we’re only at the beginning of how crypto can play a larger role in US society.
What can we expect next?
It says without a given that the executive order will keep on targeting investigations on assessing and mitigating risks with crypto – including crime, terrorism, corruption, and financial stability.
Biden’s Administration has also called for more public information regarding how crypto can be used for illicit finance, expanding upon the Executive Order’s original concerns.
Additionally, the Executive Order also takes into account for financial inclusion – where it calls for an analysis on the potential of including those who are financially marginalised.
However, there’s much sceptism around regarding such initatives – in addition to the suspicion of the possibility for the already-pilot-planned digital dollar CBDC.
The US however wants to maintain a leading position in the future of money and how it can lead to greater systemic changes – including broader ecological issues like climate change. Eventually, lawmakers ended up writing up text that mentions how crypto can impact the climate – which also goes in line with how the Biden Administration holds climate change as high priority.
In regards to preventing the next crypto crash – regulators and lawmakers are already reviewing whether disasters like Celcius, Terra, and FTX can be kept at bay. In any case, there’s always more content for regulators out there to hopefully discuss with crypto experts to write laws and legislation together in creating a better crypto ecosystem and future.