The administration of President Joe Biden is preparing to release an executive order for cryptocurrencies. As early as next month, federal institutions will assess the risks and opportunities posed by cryptocurrencies in the US market, according to Bloomberg.
Senior officials of the Biden administration have attended numerous meetings related to this government decision that would be drafted as an executive order. This executive order would force the White House to establish new regulatory policies towards cryptocurrencies and other digital assets.
US federal agencies have taken a mixed view of cryptocurrencies in recent years. And the Biden administration has faced various pressures from regulatory institutions to make decisions about these assets.
This decision to regulate cryptocurrencies by the Joe Biden administration comes at a time of widespread investor interest in the volatile cryptocurrency market. Bitcoin, the largest cryptocurrency on the market, fell below $34,000 today, despite reaching a record high of almost $69,000 in November.
The proposed executive order would detail the economic, regulatory and national security challenges that cryptocurrencies pose for the market. Especially its use in illicit activities, according to anonymous spokesmen for Bloomberg.
An American CBDC
The Joe Biden administration is expected to consider the possibility of the United States issuing a government-backed digital currency, popularly known as “central bank digital currency (CBDC).” On Thursday, the Fed published a preliminary document, related to CBDCs, and opened a public comment period until May 20.
The document tiptoes around an issue that has sparked extensive debate within the Fed’s senior ranks, even as other central banks around the world are exploring the adoption of CBDCs.
“A CBDC could provide a secure digital payment option for American households and businesses as the payments system continues to evolve and may lead to new, faster payment options between countries. However, it would also present financial stability risks and privacy issues.” expressed the document of the FED.
Different people who have been present at the government meetings, however, say that the Biden administration is likely to refrain from taking a strong position on CBDCs. Since the Federal Reserve is still considering adopting them.
Some 90 countries are considering launching their own CBDCs, according to the Atlantic Council.
An American CBDC could be a way for the United States to continue to lead the digital sector of the global market. However, the FED commented that it does not intend to move forward without the support of the White House and the US Congress.