The White House is working on an executive order that will detail the government’s strategy on cryptocurrencies. The Joe Biden administration has reportedly directed federal agencies to outline the risks and opportunities of digital assets, per a Bloomberg report.
Individual federal agencies like the Financial Stability Oversight Council (FSOC) and the Securities and Exchange Commission (SEC) had so far been taking a scattershot approach in regulating cryptocurrencies. However, the White House faced continuous pressure from cryptocurrency industry executives who raised concern over the lack of clarity on the rules.The Bloomberg report suggests the executive order, which will detail the economic, regulatory, and national security challenges that cryptocurrencies pose, may be released as early as next month. The final draft of the executive order is expected to be presented to President Biden in the coming few weeks, per the Bloomberg report.
The senior administration members have held multiple meetings to draft and execute the executive order. Through the directive, the White House will assume a central role in overseeing efforts related to setting policies and regulating digital assets.The executive order will also include detailed reports from various federal agencies on the impact of digital currencies in the second half of 2022.One of the reports are expected to be released by the FSOC, a group that includes the top financial watchdogs in Washington, will evaluate the possible systematic impact of digital assets in the country. Another report aims to determine the illicit use of cryptocurrencies.
The cryptocurrency market has been witnessing a massive sell-off after US Federal Reserve signalled the end of its quantitative easing policy. Some of the top cryptocurrencies have shed up to 80 percent over the past three months. Bitcoin, the oldest crypto, has nearly halved from its all-time high of around $70,000 hit in November last year.The administration is also exploring the possibility of establishing a US government-backed digital currency or a Central Bank Digital Currency (CBDC). The administration is reserving comments on this specific issue as the Federal Reserve is evaluating the impact of the CBDC. The Federal Reserve released a preliminary discussion paper on January 20 that looked into the pros and cons of creating a CBDC. The paper that lists 22 questions on which the Fed is soliciting comments will be open to the public until May 20, 2022.A CDBC could be an essential issue for the US government as China and other countries are already in the process of embracing CBDC, which could be a threat to the dollar’s dominance in the world. However, Federal Reserve Chairman Jerome Powell has been arguing that the US dollar’s status as the world’s reserve currency is not at risk.
