Crypto is the talk of the investing world this week, for many reasons. First, there’s the massive crash that dragged currencies down 10% or more, hurting even the largest projects. There’s also the increasing concern about the environmental impacts of crypto mining activities. Now, regulation is becoming a thorn in the industry’s side. In additional to international threats, it looks like the U.S. government is crafting its own rules for the crypto world. And it’s doing so fast, thanks to President Joe Biden’s incoming crypto executive order.
Regulation is a major growing pain for the cryptosphere. Last year, that reality reared its head in China, which cracked down significantly on crypto mining and ultimately banned transactions. This harsh regulation is influencing other global powers as well. India is considering a full ban on crypto, and Russia is causing worry with its discussions of a crackdown as well.
Now, all eyes are turning to the U.S. What do investors need to know?
Biden’s Crypto Executive Order Is on the Way
- According to reports, Biden and his administration are preparing an executive order regarding cryptocurrency.
- The executive order could be coming as soon as February.
- We don’t know exact details yet. But, one can look at the track record of the Biden administration on crypto.
- Of course, last summer saw the administration begin to take issue with digital currency, accusing it of being a means to tax evasion and other crime.
- Biden’s first actual piece of legislature on cryptocurrency came in late November, when he signed into law the infrastructure bill. The bill includes requirements for crypto exchanges to report trades directly to the Internal Revenue Service (IRS).
- The government, while cracking down on hidden assets, also has become quite interested in Central Bank Digital Currencies (CBDCs). The Federal Reserve is floating the possibility of a U.S. CBDC currently.
- The executive order will likely be an amalgamation of the Fed’s advice, as well as guidance from the Office of the Comptroller of the Currency (OCC) and the Securities & Exchange Commission (SEC), all of whom have issued guidance in the last year.
- The purpose of the executive order is likely to just get something on the table. In other words, this will help Biden kick off a broader conversation. Biden’s executive order will likely assign tasks to government departments. These departments can then study crypto and prepare advice on CBDC implementation and crypto regulation.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.