Joe Biden’s Executive Order on Crypto: Here is how it affects you
The world’s cryptocurrency was worth over $3 trillion as of 2021. Moreover, it is projected to increase even more as newer coins hit the market. Hence, governments worldwide are beginning to formulate their cryptocurrency regulatory framework. From Europe to the Middle East and Africa, regulators have initiated crypto restrictions. The United States is also not excluded from this trend.
The US president, Joe Biden, signed an executive order on the 9th of March. He instructed the federal government to study the impact of cryptocurrencies on American consumers, investors, and businesses. The order also requested an examination of the risks and benefits of creating a central bank digital dollar.
What you should know about the Crypto Executive order
The executive order was, in fact, long due. The US SEC had threatened to sue Coinbase just a few months ago. This was because of its controversial lending product. Blockfi , a crypto firm, was also fined $50 million by the SEC.
Thus, the Joe Biden executive order was brought in as a directive to the US government agencies. It focuses on six key areas – consumer protection, financial stability, illicit activity, US competitiveness, financial inclusion, and responsible innovation.
- Consumer Protection
There are countless tales of creators falling for crypto scammers or getting hacked. Unfortunately, even investors fall for these scams and purchase fake assets. To address this, Biden’s order directs the Treasury Department and other partner agencies to develop policy recommendations. This is towards protecting consumers from losing their investments or being exploited.
- Financial stability
The volatility of cryptocurrencies is a key feature that makes the crypto market very unstable. This makes the risk of trading cryptocurrency very high. Accordingly, the executive order calls on government agencies to introduce sufficient cover for users. Thus, mitigating the systemic risk borne out of the cryptocurrency industry.
- Illicit activity
The order also focuses on rooting out illegal activity in the crypto space. The purpose is to prevent money laundering activities. For instance, Chain analysis reports that about $8.6 billion was laundered in 2021 via cryptocurrency.
- US competitiveness
The Biden administration also wants to explore the issuance of a digital version of the United States dollar. Again, this is to stay competitive with the other nations that have embraced a digital version of their currencies, like China and Nigeria.
How This Order Affects You
Undoubtedly, the cryptocurrency industry was due for regulation. The White House Fact Sheet for this executive order highlights that the government is looking at protecting consumer and investors’ interests. Other countries, including the UK, are also investigating how to protect global financial stability and prevent illicit finance.
This new regulatory tone is a pivotal moment in the history of digital currency. On the one hand, it gave blockchain companies and businesses the ‘green light’ to exist. Similarly, it brings bitcoin, ethereum, and other crypto tokens towards becoming a legitimate financial option for all purposes. Crypto users, investors, and consumers would be protected against the exceptional market volatility. Also, the government can finally address the financial risk and possibility of theft and fraud.
However, crypto platforms will need to adjust to these changes. Regulatory evolution implies higher compliance requirements. There will be new legal issues from these laws. This may affect the anonymity and decentralized attribute of blockchain.
In conclusion, the US and other nations have started exploring digital currencies. It is only a matter of years before the entire world follow suit. Digital currency is the future of money. Importantly, the crypto market will be safer and more protected with these newer regulations.