Biden's cryptocurrency policy seeks to keep U.S. in lead on technology

Drew Angerer/Getty Images News

President Joe Biden will sign today an executive order directing government agencies to examine the potential benefits and risks of cryptocurrencies as it seeks to position the U.S. at the forefront of technological crypto innovation, according to a White House fact sheet.

"The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate," the document said.

Besides focusing on crypto's impact within the country, the U.S. "must play a leading role in international engagement and global governance of digital assets consistent with democratic values and U.S. global competitiveness," it said.

The whole-government policy maps out six key priorities — consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.

Some parts of the plan are already in action. For example the order includes exploring a U.S. central bank digital currency, a project the Federal Reserve has already started with the release of a discussion paper in January. And in November, the President's Working Group on Financial Markets, along with the FDIC and the Office of the Comptroller of the Currency, issued a report asking Congress to enact legislation regarding stablecoins.

Congress will also play a role. "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."

The news gives cryptocurrencies some vigor, driving bitcoin (BTC-USD) back up over $40K, recently trading up 8.8% at ~$42.3K; ether (ETH-USD) rises 6.8% to $2.76K, XRP (XRP-USD) rises 4.0%, Terra (LUNA-USD) +22%, cardano (ADA-USD) +5.4%.

Most crypto-related stocks are climbing in premarket trading: Coinbase Global (NASDAQ:COIN) stock +6.9%, Bakkt (NYSE:BKKT) +7.5%, Riot Blockchain (NASDAQ:RIOT) +8.5%, MicroStrategy (NASDAQ:MSTR) +8.2%, Marathon Digital (NASDAQ:MARA) +9.7%, CleanSpark (NASDAQ:CLSK) +7.5%, Hut 8 Mining (NASDAQ:HUT) +9.3%, HIVE Blockchain (NASDAQ:HIVE) +6.4%.

Earlier, Cryptos soar after accidental release of coming executive order

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Comments

[losemoneyfast]

Maybe if the administration wants to promote technological growth they should consider consolidating or clarifying the regulators to which crytpo companies are beholden to. Further classification of digital assets as either commodities or securities could help with the decision making for these companies. An example which comes to mind is the recent case that was settled by Kraken regarding the classification of staked assets as a form of securitization. Coinbase is being charged similarly by the SEC and yet they were allowed to IPO with this business line already having been established? Just as in the semiconductor industry, I feel as though the technological growth of crypto will be hindered if not completely stifled by the murky bureaucracy at play now.

[Michael Murdoch]

The EO is a net positive for crypto in the US, despite its muddled wording considering the alternative we had all feared.

[Mike2021]

Took long enough, my guess is CDBC will make most of these currencies useless, maybe BTC will survive albeit less value.

[Michael Murdoch]

@Mike2021 CBDC exists already in Jamaica and elsewhere.

There is no way to regulate cryptocurrency at this point. To think otherwise is naive. CBDC are simply an alternate currency offering by a nation state that is legal tender. If CBDCs would cause the collapse of crypto, Jamdex would have caused a crypto price collapse by now. The notion that this will happen comes from MMT conspiracy theorists (who are rooting for this outcome) and overly worried person in the crypto community (who aren't).

[Mike2021]

@Michael Murdoch Jamdex isn't backed by a reliable nation state, US currency is world's reserve currency, through which most transactions are done. The only reason US would adopt CDBC is to preserve that status, considering most banking lobbyists are against it.

[Smithies]

The announcement of the announcement of the announcement that they don’t have a clue and need to learn more

[Alohatoyou]

"the order includes exploring a U.S. central bank digital currency" Anyone know what this is all about? US government coming up with its own home grown crypto?

[King4Coins]

@weballoon I have told people in here to buy CND, CIRCLE will be the biggest winner behind this.

[Michael Murdoch]

@weballoon CBDC. They saw that China did a digital yuan and want to do a CBDC. Given the amount of incompetence in the US federal gov't, I give it about 20 years to happen. Meanwhile, Jamaica and several island nations in the Caribbean and Pacific have them already and they were developed in 6 months or less.

[Michael Murdoch]

@King4Coins While that would make absolute sense. That is, that the US gov't would use USDC-USD since it both works and satisfies most regulatory requirements, and while it's certainly possible, I have substantial doubts it won't happen. 3 reasons why 1) the gov't (esp treasury) doesn't have complete control 2) a bunch of people in gov't bureaucracy can't lay claim to the accomplishment. 3) no defense contractors or tradfi who donated to political campaigns make $.

Google VirtualCaseFile some time, that's how the US gov't actually works on large contracts IME.

[alphaseek2018]

So no ban? OK, that's great. LONG more ETH and BTC!!!

[magichr]

@alphaseek2018 it a good sign for crypto but to think eth or btc are the ones that will win is just dart throwing. I still don't like btc block chain its obsolete to other block chain competitors. Eth is probably the better investment. It has a better blockchain and can do more things, but there is a lot of competitors and new block chains being created that imo are better then both of them. Investing in crypto exchanges are better then investing in the crypto themselves. But if one of your dart throws hit you can make a lot of money.

[Smithies]

@magichr you have not studied networks and it shows.

[Bitit]

Wow I'm somehwat surprised it seems the govt will be taking a somewhat positive and smart approach to crypto. Good news for all the scared investors the past few months that have been selling and holding off on getting back into Bitcoin.
This decade is gonna be insane for Bitcoin. Last decade is when Bitcoin became 'a thing'. This decade is when Bitcoin becomes integrated into society.

[SeriousUsername]

"Our decentralized bags will be centralized, this is somehow a good thing for our worthless code!"
5 months earlier:
"Who cares if Yellen's comments imply the US will outlaw crypto, it's decentralized, this is somehow a good thing!"
Oh and lets not forget everybodies favourite joke:
" Its a hedge against the stock market/ the economy/ gold !"
These people are hilarious.

[Browns7777]

They're about to print into inflation this year so at least they're leaving us some off ramps. Stables protect USD as well

[magichr]

@Browns7777 no they are not printing they are going to be raising interest rates

[Wez]

Good, the amount of fraud in this space is immense...

[JMS89]

@Wez Yes, there is absolutely no fraud in cash! No under the table dealings, no money laundering, drug dealing, weapons dealings. Thank god for the hard dollar that is being inflated 15-20% a year.

[Wez]

@JMS89

You confuse illicit activities using cash as a currency, with what I posted. Fraud in the Crypto space is well documented, the amount of it is staggering.

www.sec.gov/...

[magichr]

@JMS89 and it still worth around a dollar some how.

[networks_insider]

Wow, did the White House itself write this headline? This is all about controlling anything they don’t currently control, not about technology leadership or other bs.

[Gary Gambino]

Crypto is up today because it's a high-beta trading vehicle and the market is up. News of enhanced regulation should be a negative for crypto.

[soniczoo]

@Gary Gambino Ended way down and there'll be no end to this selloff. Cryin shame.

[NFTyGallery33]

They want to centralize decentralized forms of currency so they can regulate (control) them. Government control and oversight of currency is the exact reason why cryptocurrency was invented in the first place. IF they can't control it, they outlaw it. Capitalism - only legal if it can be controlled by the US gov't.

[B D]

@NFTyGallery33 it's OK, they are regulating themselves out of business. At the end of the day the best idea will win but freedom itself is under attack and can win by creating decentralized systems that outcompete the government.

[billrla]

Executive Order. Jabo, Herr Commandant!

[JMS89]

Yet, Taxation of crypto is still a gray area. No clear guidelines on staking that i have seen.

[nifong]

There's no better time to withdraw stacks of hundred dollar bills at the bank and buy gold coins with them from someone who doesn't care what your name is.

[dandroidz]

Just think how easy all that illegal Govt asset forfeiture, i.e. THEFT, will become with digital wallets and controls!

[BigShort]

They're building a perfect control system. If they decide you are criminal then just freeze those assets...

[dieuwer]

@BigShort If they decide you voted for the wrong party, they will freeze those assets.

[B D]

@BigShort yeah, Canada just demonstrated how easy it is to do. Government has been having a lot of fun with changing definitions and rules to suit it's own interests. How loose can they define a vaccine for future mandates and travel restrictions?

[Hadrian Archo]

It seems like the middle ground on crypto may win in the long run. The revolution of the crypto maximalists will be integrated!

[neddie 7777777]

A turn off of switch and you'll be crying for mommy.