Biden Signs Historic Pro-CBDC Cryptocurrency Executive Order
The U.S. is thinking of following China down the rabbit hole
I think the main takeaway is the U.S. will follow China into forming its own digital fiat currency. The Biden administration is throwing its support behind further study and development of what would be known as a U.S. Central Bank Digital Currency.
U.S. President Joe Biden signed an executive order on March 9th, 2022 calling on the government to examine the risks and benefits of cryptocurrencies. For Bitcoin this was somehow an affirmation, with the price of Bitcoin rising around 7-10%.
"My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC," the executive order reads. The U.S. is seen at risk in the two decades ahead for the U.S. dollar to remain the global reserve backed currency.
China’s increasing ties with Russia could actually speed up the process where China’s already active CBDC can change the course of history with a blockchain based currency.
The White House’s approach to crypto has attracted fresh attention in recent weeks as Washington and its allies have levied sanctions on Russia, prompting concerns that firms and individuals there could use crypto to evade the restrictions. While China will certainly take more of Russia’s Oil, commodities and debt, it’s not clear how Bitcoin could also be used to under-mine the U.S. dollar as the global reserve.
The U.S. is essentially “late to the party” when it comes to a central bank based digital dollar.
The Executive order is actually quite sound. The measures focus on six key areas: consumer protection, financial stability, illicit activity, U.S. competitiveness, financial inclusion and responsible innovation. With stories like these (Justin Sun’s fiasco), you really have to wonder if Crypto should be banned or very strictly regulated.
The problem however it’s all still quite vague for an industry that needed serious regulations a long time ago. The order, which has been in the works since last year, will require federal agencies across the government to report later this year what they’re doing regarding digital assets. But what does this even mean?
There had been reports of a divide between White House officials and Treasury Secretary Janet Yellen leading to delays in the policy rollout.
The measures announced Wednesday will focus on six key areas:
Consumer and investor protection
U.S. competitiveness on a global stage
Protecting consumers is an important part of the directive. However since the scammy era of ICOs, NFTs in 2022 have been just as bad. So not sure what the Government is doing to actually protect consumers?
The Biden administration is calling on the Treasury to assess and develop policy recommendations on crypto. It also wants regulators to “ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets. This as China is pushing out its Digital Yuan which is perhaps 5 years ahead of the U.S.
Under the plan, federal agencies from Treasury to the Commerce Department will have to research a number of topics, including the pros and cons of the government launching a U.S. digital currency. The directive also calls for studies and policy recommendations on issues ranging from protecting consumers to climate change. This has all been going on since 2009, in 2022 “make more studies” is a bit non-sensical.
While policymakers have been keen to downplay any systemic risks resulting from crypto, there have been increasing concerns over the role played by stablecoins. These are digital tokens that are meant to be pegged to the value of existing currencies like the U.S. dollar. With the Ruble likely to default with hyper-inflation you really have to wonder, it seems like Russia’s loss is likely to be China’s gain. There’s even some speculation that China could face secondary sanctions due to its support of Russia.
For years, the crypto market has been hindered by a lack of regulatory clarity in the U.S., I’m not really seeing how this changes anything especially. The order calls for regulators to help outline risks tokens could pose to financial stability and offer suggestions for new rules or legislative changes. Officials will also have to develop a framework for engaging with international partners on setting standards for digital assets. That will likely take years while Silicon Valley and Wall Street tycoons get rich on crypto’s continued speculation.
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It certainly does make you wonder.