Mar 11, 2022 · 3 min read · cat
Towards crypto regulation, the United States President, Joe Biden, signed an executive order directing the federal government to investigate the risks and benefits of cryptocurrencies and likewise urges government agencies to establish an approach to the regulation and oversight of the digital assets financial sector.
It’s been a long time coming, and the crypto industry has been waiting for it, not least because of mounting regulatory concerns throughout the world about the new digital asset market. While the directive is the first big move towards crypto regulation, it isn’t the full-fledged crackdown that some had expected from a White House that had spent months warning about imminent supervision. Many crypto enthusiasts are ecstatic about the new rule, as the price of Bitcoin soared high against what people had expected that the new order might bring a dump to the market.
The government has outlined a national policy for evaluating digital assets into six key goals.
1. Consumer and investor protection
2. Financial stability
3. Illicit finance
4. U.S. leadership in the global financial system and economic competitiveness
5. Financial inclusion
6. Responsible innovation.
What does this mean for the crypto-world?
The executive order will impact the entire crypto world worldwide. It’s critical to pay attention as the United States takes the lead. Because the United States has one of the world’s greatest economies, whatever action it takes, all other nations, especially India, will be watching and possibly following. However, here’s what you need to know for now.
Privacy: The executive order’s language suggests that the federal government is not only preparing to regulate, but is also considering getting involved in it. Biden advocated for creating a digital currency that would be backed by CBDC that could be used to convert cash to cryptocurrency and vice versa. It would also make these institutions the middlemen for crypto transactions. Perhaps, this may jeopardize some of crypto’s privacy features, and if care is not taken, crypto may become an advanced form of digital fiat controlled by centralized authorities.
Adoption: The Biden administration warned that the growing popularity of digital crypto assets might increase the risk of them being used to laundering money, bankroll terrorist groups, and assist cybercrime. Aside from this, due to the unregulated market, criminals are leveraging this to cart away people’s hard-earned money via rug pulls projects. Undoubtedly, this EO has signaled a bye walk-over end for criminals who intend to paint the crypto industry black for their illicit ways. People will be more convinced to adopt Bitcoin, stable coins, and other cryptocurrencies since they know it is now a regulated market and that the government is involved. This is enough to understand why there was a surge in the price of Bitcoin following the speech by the President.
In a nutshell, the executive order will serve as a tool to promote Bitcoin acceptance while assuring investors that digital assets would eventually align with traditional regulatory requirements.
Overall, the order aims to lay a robust framework for adopting digital assets as a whole. The most important thing and good news for all crypto enthusiasts is the Biden administration’s implicit recognition that digital assets and distributed ledger technologies have entered the mainstream and that the government needs to start formally adopting them into the regulatory environment.
It’s also crucial to remember that this is more of a road map to regulation than a set of precise rules or standards. Nonetheless, the executive order is a significant step toward regulatory clarity, and the general tone indicates a recognition of the challenges of regulating such a big industry.
About Linear Finance
Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol that allows users to get synthetic exposure to various assets, including cryptocurrency, commodities, and market indices. Users can utilize our cross-chain swap functionality to instantly swap assets across leading blockchain environments and DeFi protocols with unlimited liquidity and zero slippage.