Biden’s Crypto Executive Order May Be ‘Watershed Moment’ Despite Lack of Specifics

Crypto legislation will likely play out over years, rather than months, industry participants say

article-image

US President Joe Biden | Source: Shutterstock

share

key takeaways

  • The Biden administration’s roadmap shows the US wants to be a leader in digital assets, says former Coinbase policy head
  • The executive order calls for “placing urgency” on the research and development of a potential US CBDC, but does not mention stablecoins

The new executive order on digital assets from President Biden is an important step in the policymaking process, according to industry watchers, though concrete legislation could take years.

Biden signed the executive order Wednesday, which outlines the government’s approach to digital assets and their underlying technology, according to a White House statement.

John Collins, partner at advisory firm FS Vectors and former policy head at Coinbase, said while Biden’s executive order held few surprises, the fact that the administration is stepping in is a net positive for the industry. 

Collins compared the executive order to the Clinton administration’s “Framework for Global Electronic Commerce” released in the 1990s, which studied the future of the internet.

“It’s clear that the administration realizes that this is not going away and that they really stress the critical importance of the technology in various applications to the benefit of the financial system going forward,” Collins said. “They want to make sure that the US is ahead of it.”

The price of bitcoin was roughly $41,840 at 4 pm ET — up 8.6% in 24 hours.

“An effort to establish more clarity to the regulatory framework will definitely bring more confidence to investors and welcome more Americans to the crypto ecosystem,” said Thomas Hook, Bitstamp’s US chief compliance officer. “While crypto markets may continue to be volatile, today’s news shows that recognition from the Biden administration is encouraging to the market.”

What’s next?

The order outlines its focus on crypto regulation around consumer protection, financial stability, risk mitigation, the US’s financial leadership, financial inclusion and responsible innovation.

There will likely be requests for information, roundtable discussions and working groups formed in coming months, though concrete actions will take time, Collins said.

“Throughout there’s a recognition that there needs to be more clarity,” he said. “Maybe it’ll be on securities issues, maybe it’ll be on illicit finance, maybe it’ll be on other things — probably all of them, and I think that’s good.”

Kristin Smith, executive director of the crypto lobbyist Blockchain Association, told Blockworks the start of fact-gathering and research around these topics is “a really healthy first step in a policymaking process.”

The order calls for agency reports to be completed within six months, with lawmakers and the public then having the chance to weigh in. 

“Obviously we’ve got a lot of work ahead of us, and we may not like every single policy proposal that’s put forth six months from now, but at least we can think methodically about this and engage with the government,” Smith said. 

A call to further study CBDCs

Among the more surprising pieces of the order, Smith said, was the focus on central bank digital currencies (CBDCs). 

It calls for “placing urgency” on the research and development of a US CBDC — though that’s not a guarantee it would ever be rolled out — as well as assessing requisite technology.

In its January Central Bank Digital Currency report, the Federal Reserve declined to make policy recommendations. 

The Blockchain Association is neutral.

“I think the important thing for us is we want the ability of private organizations and individuals to build technology around the dollar, and that’s what we’ve seen with dollar-backed stablecoins,” Smith said. 

Stablecoins are conspicuously absent from the executive order. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have both expressed concern over their security and safety.

“It’s not surprising that stablecoins are not mentioned, because Yellen is already working on it in detail,” John Belizaire, founder and CEO of Soluna Computing, said. “Also, a US digital currency is a competitor to stablecoins.” 

Congress is looking to tighten its reins on stablecoins. Bills along those lines will likely be introduced by US lawmakers later this month, Blockworks reported.

Jeremy Allaire, CEO of Circle, the issuer behind the largest stablecoin, USD Coin (USDC), called the executive order a “watershed moment.”

“The US government now has a whole-of-government approach for supporting the open, internet-native economic infrastructure ushered in by new Web3 technologies — bringing the country a step closer to ensuring the US dollar remains the currency of the internet and that the US remains the home of principled innovation and competition,” Allaire said.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Do Kwon may miss the start of the March 25 trial in the SEC’s case against the former executive and Terraform Labs

article-image

Riot Platforms bought 31,500 more mining machines while CleanSpark has begun operating in Mississippi

article-image

Dencun was activated on all testnets, a blog post Tuesday said

article-image

Hut 8 also announced it broke ground on a Texas mining site

article-image

Uniswap aims to become a “complete platform for swapping” following its latest product releases

article-image

Continued demand for bitcoin ETFs coupled with greater demand for bitcoin from exchanges is contributing to price moves, analysts say