What You Need to Know
- The order should result in regulation and legislation that guides advisors and their firms while mitigating financial risks for investors.
- The number of advisors who've personally invested in the new asset class nearly doubled in 2021 to 47%, according to a Bitwise/ETF Trends poll.
President Joe Biden has signed an executive order to Ensure Responsible Development of Digital Assets, and the crypto community is cheering.
Despite the fact that crypto has existed under three U.S. presidents, this is the first such order from the White House.
Neither Barack Obama nor Donald Trump issued any executive orders pertaining to crypto — inaction that helped perpetuate what some call a “wild west” atmosphere.
President Biden’s order is thus not only the first such order, it is highly supportive of blockchain and digital assets — resulting in even further celebration within the crypto community. (Bitcoin’s price rose 10% on the order’s issuance.)
Through the order, Biden has ordered the federal government to come up with a plan for digital assets. The administration says the order is a response to the “explosive growth” in digital assets, the growing number of countries exploring central bank digital currencies and a desire to maintain American technological leadership.
All this is long overdue.
As a result of the order, federal agencies will work with Congress to establish policies that guard against risks while helping drive innovation in blockchain technologies.
The order focuses on six key priorities:
- Consumer and investor protection
- Financial stability
- Illicit finance
- U.S. leadership in the global financial system and economic competitiveness
- Financial inclusion
- Responsible innovation
The administration also ordered an exploration of a “digital dollar” that protects Americans’ interests. This is, of course, a reference to a Central Bank Digital Currency.
Several countries have already launched CBDCs, and 80 more are exploring them. The Bank for International Settlements, a group of the world’s central banks, says every country will have a CBDC by 2030.
Work is already underway on a U.S. CBDC. The Federal Reserve began exploring the idea last year, and recently released a report detailing the pros and cons of such virtual money.
The report didn’t take a position on whether it thinks the U.S. should issue a CBDC. The president’s order places new urgency on research and development of this issue, saying efforts are “in the national interest” of our country.