We’ve recently spoken about the importance of not jumping to conclusions when it comes to the crypto market, especially negative ones. For market participants, it has proven to be an exceedingly difficult exercise. When Biden was voted in office back in 2020, many in the crypto sector came to the conclusion that a Biden presidency could result in an increase in the federal government’s oversight of cryptocurrencies. But now that the White House has finally released what so many for so long have regarded as the ultimate boogeyman, Biden’s crypto executive order, we once again see that fears seem misplaced.
A short history and a shorter attention span
Another thing crypto speculators can sometimes be guilty of is a lack of long-term retrospective.
For example, who remembers that roughly a year and a half ago, the Trump administration legislated and funded the COMPETE bill? We were going to beat China on blockchain!
Let’s examine them in the order that appears most interesting to the President.
Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System
Biden would like the Department of Commerce to establish a framework that will ensure U.S. competitiveness in the digital assets sphere. In other words, the administration recognizes how big of a thing crypto has become and wants the U.S. to stay at the forefront. This also ties to the CBDC section of the order. It’s refreshing to see the acknowledgment by policymakers that CBDCs aren’t the greatest thing ever, and pose plenty of issues to financial stability and privacy.
With that said, with over 100 countries looking into or outright wanting to implement a CBDC, it makes sense that Biden is urging studies into a digital dollar. It seems that the refreshing takes both directly related to the bill and Biden’s administration don’t stop there. For example, officials have shot down the notion that Russia will be using cryptocurrencies to avoid sanctions on multiple occasions.
Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets
Is the “illicit activity” part of the bill going to address what really passes for illicit activity in the sector? Last month’s seizure of more than $3 billion in crypto related to the 2016 Bitfinex hack is pointing towards the right direction. The Securities and Exchange Commission has consistently been on the trail of crypto companies issuing hasty or dubious products and derivatives. Biden’s urges for inter-agency cooperation tie into this, as well as the consumer protection part of the bill.
Protect U.S. and Global Financial Stability and Mitigate Systemic Risk
Well, this is an obvious one, given the size of the crypto market. The last thing we need is something else that’s “too big to fail,” after all… imagine the Federal Reserve bailing out Coinbase – the horror!
There is also an interesting part of the bill that might be worth quoting outright:
Promote Equitable Access to Safe and Affordable Financial Services
by affirming the critical need for safe, affordable, and accessible financial services as a U.S. national interest that must inform our approach to digital asset innovation, including disparate impact risk. Such safe access is especially important for communities that have long had insufficient access to financial services.
Would Biden like to see more cryptocurrency on-ramps, Bitcoin ATMs and crypto IRAs? Maybe so!
Summing it all up
In short, the bill is about keeping the U.S. ahead of the crypto game. From there, it’s about keeping the market stable, or at least from collapsing and taking down the nation’s financial system.
More distantly, it’s about regulating outright fraud and promoting sound, sustainable crypto use among U.S. citizens.
A lack of any overt naysaying in the bill had an immediate boost on crypto prices. Jeremy Allaire, CEO of crypto firm Circle, seemed impressed:
White House Exec Order and U.S. Government Strategy for Digital Assets — a thread with thoughts; TLDR = this is a watershed moment for crypto, digital assets, and Web 3, akin to the 1996/1997 whole of government wakeup to the commercial internet. (1/7)
— Jeremy Allaire (@jerallaire) March 9, 2022
The executive order overall might be a little too vague for us to make such a bold claim. Even so, we can’t say we dislike Biden’s tone, his motives or the statement itself. Increasing crypto education and access are both really good things. Crypto education turns skeptics into hodlers. Crypto access turns the curious into the next wave of adopters.
It all looks like good news to us.