White House launches comprehensive plan for cryptocurrency regulation

In an executive order issued WednesdayPresident Biden has laid out a comprehensive strategy for the federal government’s handling of cryptocurrency, the White House announced Wednesday. The White House described the executive order as “the first-ever approach by the entire administration to address the risks and exploit the potential benefits of digital assets and their underlying technology.”

“The proliferation of digital assets creates an opportunity to strengthen U.S. leadership in the global financial system and at the technological frontier,” the White House said. in a release describing the order“but also has substantial implications for consumer protection, financial stability, national security and climate risk.”

“an opportunity to strengthen American leadership”

Among other measures, the order will instruct the Department of Commerce to develop a comprehensive framework “to drive U.S. competitiveness and leadership in and exploitation of digital asset technologies,” the release said. The order also encourages the Federal Reserve’s ongoing investigation into a US-backed cryptocurrency, dubbed a “digital dollar.”

The news of the order was first reported by Bloomberg earlier this week.

Regulators have been asking for a coordinated response to regulation since at least last year, in part because of the many different bodies involved. Consumer banking, investments and sanctions enforcement are all handled by separate branches of the federal government and all relate to cryptocurrency in different ways.

The order will have no immediate effect on how cryptocurrency is regulated or how cryptocurrency companies operate, and will instead initiate a slower regulatory process that will take years to bear fruit. Specifically, the injunction directs agencies — including the Department of the Treasury and the Securities and Exchange Commission — to assess the risks and opportunities of using cryptocurrency, which is likely to result in future regulations enacted through the Notification and Exchange Commission. comment process.

The industry’s early response to the order was positive, seeing the new framework as a way to avoid regulatory uncertainty.

“As agencies take the next step in studying the many dimensions of the cryptoeconomy, we hope they do so with a view to bringing regulatory clarity to the industry and the American public,” said Faryar Shirzad, Chief Policy Officer of Coinbase. on Twitter† “Digital assets have huge potential economic and social benefits for countries that adopt sensible regulations.”

Update 9:56 PM ET: Statement from Shirzad added.

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