On March 9, 2022, President Joseph Biden signed the most comprehensive
executive order concerning digital currency in U.S. history. There was
speculation about precisely such a move towards regulation since the beginning
of the Democrat’s term in office.
However, contrary to the fears and hopes of
many, the latest order concerning the crypto market is far more conservative
that could have been expected given the background against which it was
announced.
The United States has long been a world leader in the development and use of
crypto alternative to the regular currencies issued by national central banks
since the early modern era. Ironically, this exponential in the crypto market
has been fueled by a shocking lack of regulation at state and local levels.
Regulation at the national level simply does not exist; in fact, yesterday’s
detailed executive order was the first time ever that the White House
has officially spoken out on the question.
This is, in many ways, incredible, given that over a hundred countries around the world are already discussing or actively pursuing the idea of a national digital currency. The United States
itself, and the state of Texas in particular, has become the largest hub of
crypto mining operations in the world ever since China banned such activities
for their environmental and financial impact last year. The immediate concerns
regarding this rising financial sector also include misuse by Russian oligarchs
to evade Western sanctions imposed as a result of the War in Ukraine, although
the White House has denied this as a motive for the executive order.
All things considered; the contents of the executive order are mildly
disappointing. Far from putting restrictions on the unabated and rapid growth
of the cryptocurrency sector, the Biden executive order simply orders the
Department of Justice, the Department of Treasury, and other federal agencies
to study the situation and come up with potential new ideas to provide desperately
needed oversight to this new market. The issues being considered include the
impact of cryptocurrencies on the financial markets, the environment, and the
technical infrastructure of the nation, among others.
This is a sharp turn away from what pro-regulation activists and experts
have long called for. The executive order practically recognizes cryptocurrency
as a legitimate source of financial activity, and in fact, resulted in a
dramatic increase in the value of the Bitcoin after immediately following the
announcement. The closest the Biden administration has come to threatening the
grip of independent private actors on the digital markets is its proposals
about developing a digital version of the American dollar. The best that can be
said about this order is that it has at least initiated the process of regulation
the crypto market in the United States, but only sort of.
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