(Bloomberg) — President Joe Biden is directing government agencies to focus more on the fast-growing crypto market, from researching the US digital dollar to combating illicit finance.
In an executive order signed Wednesday, the White House called on agencies across the government to coordinate what has so far been a scatter-shot approach to the asset class. However, it fails to provide clear direction on regulation.
Under the plan, federal agencies from the Treasury to the Department of Commerce will have to conduct research on a range of topics, including the pros and cons of the government launching a US digital currency. The directive also called for studies and policy recommendations on issues ranging from consumer protection to climate change.
As of 12:22 pm in New York, bitcoin is trading above $42,000, up 10%.
Brian Deez, director of the White House’s National Economic Council and national security adviser Jake, said the order “will strengthen US leadership in the global financial system and protect the long-term efficacy of critical national security tools such as sanctions and anti-money laundering frameworks.” Sullivan said in a statement. “This will help guide the growth of the digital asset ecosystem in a manner consistent with our values, governance for both cryptocurrency and any future US central bank digital currency,” Sullivan said in a statement. Identifies policy priorities.
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Mandatory studies by the order include one led by the Treasury on the future of money and payment systems, and another from the Justice Department on the role of law enforcement agencies in detecting, investigating and prosecuting crypto-related criminal activity. It also asked regulators to help outline the risks tokens could pose to financial stability and suggest new regulations or legislative changes. Authorities will also need to develop a framework for engaging with international partners on setting standards for digital assets.
As per the executive order, agencies will have 90 days to a year to complete their studies. Once the report is out, the administration has said it plans to move swiftly to complete the recommendations.
The White House’s push to coordinate crypto regulation comes as countries from Singapore to the UK adopt standards to oversee the industry, from licensing exchanges to curbing deceptive advertising.
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Congressional committees in the US have also intensified hearings on the cryptocurrency, which has spanned a nearly $2 trillion market, to examine some of the areas that may need to be addressed through legislation. Those topics include stablecoins, which are private tokens typically pegged to the US dollar, and other fiat currencies.
At the same time, the Federal Reserve is researching the possibility of issuing a central bank digital currency, or CBDC, which could require Congressional action. The Fed has previously said that US CBDCs could help maintain the dominance of the dollar, as rival countries such as China move forward with their own volumes.
For its part, the White House is placing great emphasis on research and development of a potential US digital dollar, a senior administration official said Tuesday on a call with reporters.
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While the directive places the White House at the center of crypto policy, it is unclear how much progress can be made ahead of November’s midterm election in which Democrats face the prospect of losing control of Congress. Although Republicans say crypto regulation is needed, they have often advocated a less strict approach than their Democratic counterparts.
Biden’s plan also comes at a time of renewed focus on crypto following Russia’s invasion of Ukraine – with digital assets hailed as a major vehicle for donations to the Ukrainian government, while Russian individuals and entities It is also maligned as a possible avenue to evade sanctions.
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The senior administration official, who spoke on condition of anonymity, said that in the case of Russia, US officials do not see digital assets as a viable solution to widespread sanctions.
