Market Up: Biden signs historic cryptocurrency regulation

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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