Uncle Sam is crypto-curious... and crypto CEOs are eager to answer his questions. Yesterday President Biden issued an executive order calling for crypto regulation, signaling the federal government plans to take a more active role in regulating digital assets. Crypto-preneurs applauded the news, and Bitcoin prices jumped more than 8%. The order, unpacked:
- Biden laid out six crypto goals: 1. protect investors; 2. keep markets stable; 3. curb crime; 4. stay globally competitive; 5. boost inclusion; and 6. innovate responsibly.
- The #DigitalDollar isn’t dead: Biden also pushed regulators to explore a central bank digital currency. The Fed had already outlined pros and cons of a digital dollar earlier this year.
- Next up… homework. Biden asked the Fed, Treasury Department, and other agencies to study and report on their crypto plans by year’s end.
The ethereum in the room… Crypto has gotten too big to ignore. 40M Americans — about 12% of the population — have invested in crypto, the White House says (more than half of Americans are invested in stocks). Russia’s war on Ukraine has also raised concerns that Russia could use crypto to avoid sanctions, highlighting crypto’s growing geopolitical importance. Russia and China are among the 100+ countries developing their own digital currencies.
Crypto has a “patchwork problem”... and federal oversight could solve it. It’s easier to have set rules coming from one direction than contradictory rules coming from 50 directions. Just ask the cannabis industry: a lack of federal regulation has prevented regional weed businesses from blooming into national brands. Specific crypto rules may not come into focus for months, but crypto companies are still stoked about Biden’s order because full federal regulation could eventually provide a clearer picture for how to do business.