Today is a day investors have been awaiting for months. Why? The White House put out its first executive order on cryptocurrency. In doing so, it’s establishing a precedent for how the government will proceed with the asset class. Already, there’s a lot of chatter among industry players and politicians reacting to the policy. So, what’s the big deal?
President Joe Biden’s crypto order is the first sweeping regulation of the crypto industry in the United States. Its six-prong approach to regulating digital assets is the public’s first in-depth peek into how lawmakers will approach the still nascent and quite formidable new challenge.
News of this order comes amid swirling rumors about when the White House would finally establish crypto policy. While originally expected in February, the order was put on hold whilst Biden and his administration worked to address the crisis in Ukraine. As he and other government officials have become better able to balance their foreign policy response, though, Biden is now returning back to domestic legislature, starting with this key order.
Here’s what you need to know.
White House Crypto Executive Order Establishes Guidelines for Policymakers
- While investors have been patiently awaiting this new guidance for crypto, the rollout of the White House’s crypto executive order wasn’t as clean as lawmakers would like to admit. Details of the executive order first broke earlier this morning; the U.S. Treasury Department inadvertently published Treasury Secretary Janet Yellen’s response to the order before it was signed.
- Yellen’s response caused crypto prices to rise in anticipation of the order’s full reveal. That’s because, although she doesn’t go into detail in the response, Yellen says the Treasury supports “responsible innovation” in the industry by way of U.S. government policy.
- Earlier this morning, the order was actually published by the White House with the title “Executive Order on Ensuring Responsible Development of Digital Assets.”
- The order establishes six key priorities for the U.S. government in moving forward with its crypto policy. These priorities are about protecting investors, enforcing compliance among exchanges and platforms and mitigating the risks posed by crypto as a tool for crime. They also emphasize keeping U.S. global financial leadership through the development of its own crypto technologies, promoting access to affordable banking services and supporting the responsible development of U.S.-based crypto entities.
- The order goes on to establish several immediate policy concerns. The first of these is a plan for the U.S. to create its own central bank digital currency (CBDC). In doing this, Biden tasks Yellen and other leaders across the government to report on “the future of money.” This report is expected to provide additional guidance on a CBDC launch.
- Another section in the order tasks a team consisting of several financial entities, including the U.S. Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC). This report tasks leaders with expounding on the mass adoption of digital assets and the risks they pose to investors.
- Overall, the order does well to indicate the direction the government is heading in. One of the primary concerns of the order is obviously keeping investors safe. Yet, the government also seems bullish for crypto. The order says outright that the U.S. will support the development of the industry and promote international competition.
- Already, the order is seeing positive feedback from crypto industry players. Aave (AAVE-USD) General Counsel Rebecca Retting calls the order “a landmark moment” for Web 3.0 and DeFi products. Indeed, this order is the first bit of recognition from the government that these industries have high potential.
On the date of publication, Brenden Rearick did not hold (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.