The directive could offer much-needed regulatory clarity for digital assets and preserve the US as a global leader in technological innovation.
The new executive order from US President Joe Biden could be a watershed moment for the crypto industry in the US, according to industry participants.
Biden signed the long-awaited directive on Wednesday that outlined the government’s approach to digital assets, calling on federal agencies to examine the risks and benefits of cryptocurrencies.
The measure aims to focus on six key areas: consumer protection, financial stability, illicit activity, US competitiveness, financial inclusion, and responsible innovation.
According to the Biden administration, the move is a response to the “explosive growth” in digital assets, the increasing number of countries exploring central bank digital currencies (CBDCs), and a desire to maintain US technological leadership.
While Biden hasn’t said whether the US will launch its own digital currency, he has called on the government to place an “urgency” on the research and development of a potential CBDC.
Many industry participants hope the executive order will address the current, fragmented regulatory environment in which regulation is often achieved through enforcement actions by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In a statement provided to CoinDesk, Anchorage Digital co-founder and CEO Nathan McCauley called the order a “shot in the arm for crypto” and said that, to strike the balance of “responsible innovation” called for by Biden, “the crypto community needs to recognize that – for the benefit of our industry – regulators have a role to play in the crypto ecosystem.”
“Today’s executive order makes it clear: This isn’t them-against-us,” McCauley said.
Candace Kelly, general counsel for Stellar, echoed McCauley’s sentiment.
“Today’s order is the first step in what will likely be an extended process to get the industry the clarity we’ve been seeking,” Kelly told CoinDesk. “We now have a much better understanding of the government’s intentions and roadmap for digital assets and a commitment to support innovation in this space.”
Another proposal calls for multiple agencies to provide in-depth research into the effect of new regulations designed to curtail the use of cryptocurrency for illicit purposes, as well as the potential effects on financial markets, competition policy and cybersecurity.
In a statement, Treasury Secretary Janet Yellen — whose department will be critical to much of the progress hoped for in the executive order — praised the new policies.
“This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses,” she said.
Meanwhile, the crypto industry is facing intense scrutiny from lawmakers, including Senator Elizabeth Warren and Senate Banking Committee Chairman Sherrod Brown, over concerns that sanctioned individuals and firms in Russia may be using digital assets to bypass the sanctions. Still, some analysts and officials have questioned how effective a workaround crypto could be, given the limited size of the market.
Sources: TRT World, CoinDesk, Al Jazeera, Computer World