Biden signs executive order mandating study of federal crypto policy, including cybersecurity and a US digital currency

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President Joe Biden has signed an executive order requiring federal agencies to engage in a broad review of their policies relating to cryptocurrencies and other digital assets, the White House announced Wednesday.

The order represents “the first-ever whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology,” according to a fact sheet outlining the goals of the imitation.

The executive order focuses on six priorities of the Biden administration in the digital asset space, including consumer protection, financial stability, illicit finance, economic competitiveness, financial inclusion and innovation, and will give Agencies between 60 and 120 days to make policy recommendations.

The document was drafted with input from academics, consumer protection advocates and crypto industry leaders, who were invited to meet with policymakers numerous times, a senior official told reporters. responsible for administration.

A major area of ​​concern for the Biden administration is the risks posed by digital assets to national security in light of the growing number of ransomware attacks targeting US government institutions, businesses and critical infrastructure.

The administration remains concerned that cryptocurrencies will allow criminals to evade existing anti-money laundering and economic sanctions frameworks, although a senior administration official told reporters that he doesn’t think cryptocurrencies present a viable way to avoid recent sanctions against Russia for its invasion of Ukraine.

The order also focuses on the potential benefits of a central bank-issued digital currency, an issue the Federal Reserve has been studying extensively since 2020.

Last month, the Federal Reserve Bank of Boston released research, in conjunction with the Massachusetts Institute of Technology, on the technological viability of a Fed-backed digital dollar. Federal Reserve Chairman Jerome Powell said the Fed would not go ahead with issuing a digital currency without congressional support.

The order also follows a report from the President’s Task Force on Financial Markets, which brings together the heads of key federal financial regulators, which argued that Congress should pass legislation requiring stablecoin issuers to be regulated. like banks.

Stablecoins like dai DAIUSD,
0.01,
USDTUSD tether,
.
and USD coin USDCUSD,

are a kind of digital asset that pegs their value to the US dollar and have become widely used to facilitate trading in popular cryptocurrencies like bitcoin BTCUSD,
+10.08%
and ether ETHUSD,
+7.60%.
Their stable value makes them attractive instruments for cryptocurrency investors to store uninvested funds.

Securities and Exchange Commission Chairman Gary Gensler has also indicated that he is concerned about the lack of investor protection in cryptocurrency markets and that the industry should expect the regulator to step up. its oversight, especially of cryptocurrency exchanges that have not registered with the SEC.

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