On March 9th, President Joe Biden signed an executive order touching the responsible development of digital assets. While the executive order did not have much meat on the bones, the sentiment expressed in the order is quite significant. Lets dive in and analyze some of the major takeaways.
Acknowledgement of legitimacy
Biden's executive order starts off by acknowledging the legitimacy of digital assets, which is a huge step considering for years most government officials called the emerging asset class a scam. In Biden's statement, the President points to the fact that crytpo has surpassed $3 trillion in market cap and nearly 40 million Americans have used crypto. Furthermore, Biden acknowledges that more than 100 countries are looking to CBDCs (Central Bank Digital Currencies) as a digital form of a country's sovereign currency.
Clearly, Biden himself views the crypto industry as one that deserves to be acknowledged for its legitimacy.
Even more encouraging than the recognition of its legitimacy, Biden goes on to state that digital assets are an opportunity for the US to reinforce its leadership in finance and technology. While the President does acknowledge there are risks on the consumer protection, financial stability, national security, and climate risk fronts, he states that the US needs to play a leadership role in this emergent asset class.
"Meat" of the order
Now, the "meat" of the executive order. President Biden called for the Department of Treasury and other agency partners to assess and develop policy recommendations to address the digital asset sector, specifically in attempt to safeguard against any systemic financial risks.
Furthermore, Biden calls for the Financial Stability Oversight Council to identify financial risks posed by digital assets and develop policy recommendations to address regulatory gaps.
Additionally, Biden states that the Department of Commerce should establish a framework to drive US competitiveness in leveraging digital assets.
Finally, the President Biden insists on the research and development of a potential US CBDC.
While there were no real substantive actions in the executive order (mostly asking different parts of the government to explore digital assets), the sentiment of the order was clearly a constructive one. Biden specifically acknowledged the upside of crypto and the desire for the US to be a leader in this emergent asset class.
Furthermore, Biden did not acknowledge the SEC or Chairman Gensler in the order at all, which I interpret as a snub. Chairman Genslar is renowned for his hardline stance against crypto. The fact the SEC was not called out positively for their work could display the Biden's administration's displeasure with their current stance.
Without a doubt, industry leaders like Sam Bankman-Fried and Jeremy Allaire have done an incredible job of educating leading government officials on the benefits of cryptocurrency. While I was skeptical at first, our industry leaders have been able to make huge inroads with the Democrat party leaders.
I largely thank them for the recent positive sentiment from leading government officials.
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