INSIGHTS

Biden Signed It!

March 9, 2022

Wednesday was a historic day for cryptocurrency, as President Joe Biden signed an executive order establishing the first-ever US federal strategy on cryptocurrencies. The order calls for the contemplation of a potential US central bank operated digital currency, as well as the exploration of potential risks associated with digital assets and ways to mitigate these risks.

The executive order is crafted around six central 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.”

The Biden administration is weary of the potential danger’s cryptocurrencies pose to consumers, investors, businesses, and US financial stability more broadly. However, they also recognize the opportunities for innovation cryptocurrencies can facilitate. Thus, the hope is that this executive order will better position the US to continue to foster innovation while ensuring economic protection.

The executive order comes in the midst of the Russian invasion of Ukraine, which in many ways has highlighted both the opportunity and the risk that reverberates throughout Biden’s order. On the one hand, the Ukraine has received millions of dollars’ worth of donations in cryptocurrency to help aid both defense and the protection of the Ukrainian people. On the other hand, there is growing concern about potential Russian efforts to elude sanctions through the use of cryptocurrencies.

The need for US exploration into cryptocurrencies is completely evident. Roughly 40 million Americans, or 16% of the population, have at one point invested into cryptocurrencies of some kind, yet the regulatory landscape is still reminiscent of the wild west. This order could prove a crucial step towards the Biden administration getting the most out of cryptocurrencies without jeopardizing US financial stability.