The Outcome of Crypto Executive Order(EO) 📑
The much anticipated "Ensuring Responsible Development of Digital Assets" Executive Order (EO) from the Biden administration was released on (3/9/22). Over the last few months, there has been a cloud over the crypto markets, with a lot of uncertainty. The community was apprehensive, particularly in light of Gary Gensler's and Elizabeth Warren's comments. The EO was positively received by the community since it provided a refreshing, hopeful perspective on crypto from the government.
The market reacted well to the EO released yesterday, with Bitcoin and Ethereum both rising by 9% and 5%, respectively. The EO, in my perspective, is exactly what we needed from the Biden administration and regulators as we approach this rapidly expanding industry, a cool and collected thought process.Â
The EO is focused on directing federal agencies to research and understand the space, while thinking through regulations that will help cultivate and grow the sector.
Points Noted:
Investors should be protected.
Ensure that the United States is at the forefront of financial and technological innovation.
Push CBDC (central bank digital currency) research and determine future steps (Treasury Department report in 6 months).
Examine each agency's jurisdictions (e.g., FTC, SEC, CFTC, CFPB) and how they would need to consider rules for consumer privacy and rights.
Investigate the Consequences of Energy Policy - this part focuses on crypto mining and how it may affect space/society.
The FSOC will work on a report on market integrity and systemic risk in the space.
Treasury will provide information on illegal operations in space as well as basic KYC/AML concerns.
The EO demonstrates that we are unlikely to see hurried regulation from Congress (Warren going insane, but I doubt Dems would challenge POTUS) and that Biden was able to avoid apocalyptic headlines by proposing a gradual approach to the industry. The lack of tax commentary in the bill, as well as no reference of the IRS or how we should disclose earnings, piqued my interest. That's a significant question mark, and I'm shocked it didn't cut.
To keep innovation, growth, and economic benefits within its borders, the United States is unlikely to outlaw cryptocurrency. Is Bitcoin still alive and well? This isn't financial advice.
Acronyms Used:
FSOC: Financial Stability Oversight Council
KYC: Know your customer
AML: Anti-money Laundering
CFPB: Consumer Financial Protection Bureau
CFTC: Commodity Futures Trading Commission
SEC: U.S. Securities and Exchange Commission.
FTC: Federal Trade Commission
EO: Executive Order
Thank you for reading!