The US government has addressed cryptocurrency in the past, but now it’s taking a more comprehensive look. President Biden has signed an executive order detailing the country’s first “whole-of-government” strategy for exploring cryptocurrency and other digital assets. Officials at multiple bureaus will explore the risks and potential advantages of crypto, both for individuals and the nation at large.
The Treasury Department and partners will recommend policies to protect people and businesses, including enough regulation to protect against “systemic financial risks.” The Financial Stability Oversight Council, meanwhile, will help pinpoint economy-level dangers and suggest policies to match. On a broader level, government agencies will aim to “mitigate” risks of illegal activity and national security threats. The solution includes cooperation with international allies.
The strategy also sees cryptocurrency as a competitive tool, however. Biden’s order will establish “urgency” in researching and possibly creating a central bank-backed digital currency, including cooperation with the Federal Reserve and “experimentation” with other countries. The Commerce Department will create a framework to help spur American leadership in digital assets, while the wider government will foster development of digital assets that maintain equitability, privacy, security and minimal environmental impact.
The Biden administration was clear on its goals. The order is meant to steer cryptocurrency and digital goods in a way that’s “consistent with our democratic values,” according to NEC Director Brian Deese and National Security Advisor Jake Sullivan. That is, it would help the US maintain a leading position in global finance without jeopardizing economic stability or worsening inequality.
The executive order promises to give the US a more unified and aggressive approach to cryptocurrency. Previously, it took a more reactive stance where regulators would crack down on illegal activity by applying existing rules to digital assets. Theoretically, this could lead to the creation of an official “digital dollar” and otherwise clear the way for crypto to further enter the mainstream.
With that said, the order is relatively short on firm policies, and doesn’t establish timelines. There are no guarantees this will lead to concrete action, at least not in the near future. Still, the US government hasn’t taken a holistic view of cryptocurrency before — it’s a start, even if there’s much more ground left to cover.
