Washington, February 22:US President Joe Biden is likely to move executive order to regulate cryptocurrency this week, as per media reports. As per a memorandum by the US National Security Council (NSC) memorandum, government agencies, include the Departments of the Treasury, State, Justice, and Homeland Security, will be asked to assess the risks and opportunities that crypto poses, and delve into the details of a central bank digital currency, Bloomberg news cited an administration official as saying last month.
The agencies will also review the impact of digital assets on financial stability, and normalising regulations for crypto with other countries. The Biden administration had in September last year, released recommendations proposing that only banks be allowed to issue stablecoins.
The administration's intervention is "symbolically significant as the White House would be acknowledging that crypto is becoming economically important", Jaret Seiberg, an analyst at Cowen -- a financial services company - was quoted as saying by Yahoo Finance.
Seiberg added that it reinforces the idea that crypto is here to stay. "The White House would not issue such an order if it was not convinced that crypto will continue to grow and spread throughout the economy," he added. The executive order could also offer the White House the opportunity to weigh in on a digital dollar, the report said.
The White House seems to be putting a more concerted effort towards the CBDC as various countries have already set up a framework for their own. But the biggest competition for the US seems to be from China, which has already onboarded millions for using its digital yuan. This could significantly weaken the dollar's dominance in the world.
What the administration would do is crackdown on Coinbase and others and use regulations to make it so onerous for the exchanges, especially if Biden is going to call it a matter of national security," speculates Vladimir Signorelli, founder of investment research firm Bretton Woods Research and a Bitcoin investor. "If they increased taxes, treated it differently, it would be unfortunate. It would be terrible", he told Forbes.
The Departments of Treasury, State, Justice and Homeland Security are tasked to evaluate payment systems, environmental impact, and financial stability issues associated with cryptocurrencies.The Office of Science and Technology will also be directed to develop an evaluation that details the support structure required to create a CBDC. The office is also supposed to submit a comprehensive report on distributed ledger technology within 180 days, with a secondary report on its impact on the environment in 545 days.
