According to the Associated Press, “Washington (Washington) (AP)—” The financial industry was cautiously optimistic about President Biden’s long-awaited executive order on Biden’s cryptocurrency, but with so many key details still unresolved, it’s difficult to predict the order’s policy outcome.
The White House became the first major government institution to take a position on cryptocurrency with its March 9 order. While this order is meant to provide guidance to the Treasury and other regulatory agencies, it also marks a significant turning point.
This is an excellent time for stakeholders to exert influence over the final course of regulation and policy.
Consumer advocates and regulators alike hope to persuade the US government to seriously consider developing its own digital currency, while banks hope for clear rules of the road and crypto can help underserved households participate in the economy.
‘The devil will be in the details,’ said Josh Lipsky, an Atlantic Council senior director who previously advised the International Monetary Fund and worked for the Obama White House.
To legitimize it, we must decide who will be on which side of regulation and what those regulations should look like.
The executive order was generally welcomed by cryptocurrency supporters. Instead of focusing solely on the risks, the executive order acknowledged cryptocurrency’s potential, assuaging some concerns in the process.
This is “further evidence that the crypto ecosystem is now a vital and inseparable part of the national economy,” according to the Blockchain Association. Bitcoin prices increased by about 10% on Wednesday before falling back the next day.
It Could Possibly Benefit Both The Countries
The Washington banking community was generally supportive of the crypto order. According to the Bank Policy Institute, a regulatory framework that includes both financial technology (fintech) and cryptocurrency startups would benefit both industries.
Regulated financial institutions, according to the trade group, have been “stuck on the sidelines waiting for further regulatory action before expanding their digital offerings.”
A monetary authority Banks, on the other hand, were less enthusiastic about digital currency.
As more research on digital currency is conducted in the United States, it is expected that “CBDCs would impose significant and unavoidable costs on the financial system and economy while producing few, if any, tangible benefits.”
Rob Nichols, president of the American Bankers Association, is concerned that the order “clearly directs federal agencies to pursue a central bank digital currency even before the order also requires that a US CBDC be ‘in the national interest.'”
The short- and long-term consequences of the administration’s renewed emphasis on cryptocurrency are examined below.
Regulators Who Are Ahead Of The Curve Are Hard To Come By
Until now, cryptocurrency regulation has been fragmented, with various government agencies largely following their own rules and agendas.
Gary Gensler, a blockchain professor at MIT Sloan School of Management, has emerged as Washington’s proto expert at the SEC, which has been the most aggressive.
The Wild West analogy he employs to describe cryptocurrency regulations is also used to compare digital assets to the automobile industry, which he claims only became profitable after extensive regulation was implemented.
According to Todd Phillips, director of financial regulation and corporate governance at the Center for American Progress, President Biden’s administration “recognizes that regulators have existing authority to get their hands around crypto-assets.”