President Joseph Biden signed an executive order Wednesday to “ensure responsible development of digital assets,” or to regulate the previously unrestricted world of cryptocurrency, which according to the White House, surpassed $3 trillion in value in November.
“The financial innovation and the technological innovation underlying this boom has a lot of potential benefit, but the risks and the costs are increasingly becoming apparent,” Brian Deese, director of Biden’s National Economic Council, told CNBC. “We need a 21st-century government structure to actually address this.”
The executive order was a long time coming and calls for federal agencies to study the “risks and benefits” of digital assets. Specifically, Biden is asking federal agencies to address seven measures of protection and mitigation:
- Protect consumers, investors and businesses with oversight by the U.S. Treasury Department to develop policy recommendations to “address the growing digital asset sector”
- Protect economic stability in the U.S. and globally by calling upon the Financial Stability Oversight Council to mitigate financial risks and fill in any regulatory gaps
- Mitigate national security risks caused by the “illicit use of digital assets,” like the use of cryptocurrency on the dark net to take part in illegal transactions that could fund terror acts and trafficking
- Promote U.S. leadership in technology and economic competitiveness by ensuring that even though the federal government wants to regulate cryptocurrency, that digital innovation is still allowed to thrive, especially in competition with technology leaders globally
- Promote “equitable access” to financial services to make sure that the U.S. approach to digital asset innovation is low-risk and accessible to all communities
- Ensure responsible future development of cryptocurrency by having the federal government support and study the development and design of digital assets
- Explore the possibility of centralization with a possible U.S. Central Bank Digital Currency which would “be in the national interest.”
“The administration will continue work across agencies and with Congress to establish policies that guard against risks and guide responsible innovation, with our allies and partners to develop aligned international capabilities that respond to national security risks, and with the private sector to study and support technological advances in digital assets,” a White House press statement on the executive order said.
In response to the announcement, price of Bitcoin jumped 11% on the stock market as the crypto community awaits further clarity on what regulation could look like.
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