President Biden's crypto executive order pleases the industry but fails to prop Bitcoin
President Biden signed the long-awaited executive order on the amount of government reach over crypto and the seven priorities listed there are so far from the expected regulation crackdown that crypto execs and analysts alike sighed with relief. Instead of hard policy positions, the executive order proposes examining policy provisions, identifying key issues, and increasing the amount of coordination between agencies tasked with monitoring the industry, as for example, in the area of fraud prevention:
Within 180 days of the date of this order, the Attorney General, in consultation with the Secretary of the Treasury and the Secretary of Homeland Security, shall submit to the President a report on the role of law enforcement agencies in detecting, investigating, and prosecuting criminal activity related to digital assets. The report shall include any recommendations on regulatory or legislative actions, as appropriate.
That's a far cry from the haphazard approach before that when last-minute provisions and bill amendments sent crypto exchange execs and regular investors into a regulation compliance tizzy. These are the key crypto control areas that the government will be focusing on now:
- Protect U.S. Consumers, Investors, and Businesses
- Protect U.S. and Global Financial Stability and Mitigate Systemic Risk
- Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets
- Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System
- Promote Equitable Access to Safe and Affordable Financial Services
- Support Technological Advances and Ensure Responsible Development and Use of Digital Assets
- Explore a U.S. Central Bank Digital Currency (CBDC)
That last point refers to the creation of the digital dollar that is still in the exploratory stages. "This effort prioritizes U.S. participation in multi-country experimentation, and ensures U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values," says the order. This may be alluding to potential CBDC exchange partnerships with other nations that see eye-to-eye with the U.S., and may be used to counter the proliferation of the digital yuan. The majority of industry insider comments were positive, and Bitcoin jumped double digits after President Biden's crypto executive order was signed, only to retreat back down in broader risk assets switch-off. According to Jeremy Allaire, the CEO off the Circle exchange:
The Biden Administration’s Executive Order on digital assets represents a watershed moment for crypto and Web3, akin to when the government in the 90s realized the commercial power of the internet. The U.S. government now has a whole-of-government approach for supporting the open, internet-native economic infrastructure ushered in by new Web3 technologies, bringing the country a step closer to ensuring the U.S. dollar remains the currency of the internet and that the U.S. remains the home of principled innovation and competition.