President Joe Biden’s executive order on digital assets, signed March 9, has been widely lauded in the crypto industry — many financial experts see this unified approach to crypto regulation as a long-awaited recognition and advancement of the space.
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For example, Cameron Winklevoss — president of Gemini — called “the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology” a “watershed moment” via a LinkedIn post. Winklevoss’ post continued to suggest that Biden’s EO paves the way for thoughtful national crypto regulation — regulation that will allow builders to build onshore and ensure that the U.S. remains a leader in crypto.
Many experts noted that this was also a very welcomed and positive development for Bitcoin. Brock Pierce, Bitcoin Foundation chairman, told GOBankingRates that the executive order will make investors’ Bitcoin safer “because the government acknowledges that they need to take a thoughtful and coordinated approach to embracing cryptocurrency innovation and they will not, and likely can not, seize Bitcoin and other cryptocurrency assets.”
“The executive order is very positive in that it showed an open-minded approach and a framework for government agencies to work with entrepreneurs, investors, and other stakeholders in the cryptocurrency space to embrace it,” Pierce added.
Similar sentiment was also outlined in a NYDIG report, which said that the order “puts to bed” the notion that the U.S. government has any interest in banning Bitcoin and other digital assets.
Greg Cipolaro, global head of research at NYDIG, told GOBankingRates that the order “demonstrates the White House’s willingness to bring thoughtful, coordinated regulation to the asset class, something the industry has long sought. The administration acknowledges the industry is here to stay and can be a source of technical innovation in the U.S. given the appropriate guardrails.”
Another key takeaway from the EO is the emphasis on the potential benefits of a U.S. central bank digital currency (CBDC). CBDCs have been discussed previously by government officials, mostly in conjunction with the Federal Reserve Board’s release — in January — of its long-awaited discussion paper concerning the pros and cons of a CBDC. However, directives related to any CBDC have been vague so far, and the paper did not favor any policy outcome.
Biden’s latest EO, however, indicates “placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest,” per a White House outline.
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Ari Redbord — a former senior Treasury Department advisor and now head of legal and government affairs at blockchain intelligence company TRM Labs — told GOBankingRates that the language in the executive order around a CBDC is interesting for a number of reasons.
“First, as opposed to the Fed’s January paper on CBDCs which poses pros and cons, the order calls for ‘urgency.’ This does not mean we are headed to a CBDC but it is the White House calling for movement,” Redbord said. “Perhaps the most extraordinary piece of the order is that it frames the CBDC discussion as a question of national security and national interest calling for the U.S. to lead in the digital space race in order to ensure that a global digital currency is consistent with democratic values. This was a clear call out to China and its digital Yuan project.”
Indeed, the order states that a U.S. CBDC that is interoperable with CBDCs issued by other monetary authorities could facilitate faster and lower-cost cross-border payments and potentially boost economic growth, support the continued centrality of the United States within the international financial system, and help to protect the unique role that the dollar plays in global finance.
Linda Jeng — visiting scholar on financial technology, adjunct professor of Law at Georgetown University Law Center’s Institute for International Economic Law, and senior lecturing fellow at Duke Law School — told GOBankingRates that “we are finally catching up with other G20 countries in developing a national digital assets strategy.”
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“I hope this is a first step toward a broader national data strategy that contemplates a privacy framework of consumer data rights when we use digital assets and CBDCs,” she said.
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