Crypto industry sees hope as Biden puts out executive order to study cryptocurrencies, US CBDC

US President Joe Biden has signed an executive order to establish risks and advantages of cryptocurrencies, as well as the legal and economic effects of creating America’s central bank digital currency (CBDC). 

“President Biden will sign an Executive Order outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology,” the statement put out by the White House on Wednesday read.   

The Order, according to the White House, will lay out a national policy for digital assets across six areas — financial stability, illicit finance, consumer and investor protection, US leadership in global financial system, financial inclusion, and responsible innovation.   

In September last year, the US government had released an executive order to combat the threat of ransomware and other cybercrime, more specifically in relationship to cryptocurrencies used as a mode to collect and transact ransom.   

On hearing the news, Bitcoin was trading at 8% higher, while Ethreum was also trading in the positive as the crypto industry saw the move as the first step towards some sort of regulatory clarity on cryptocurrencies. The lack of a regulatory framework for cryptocurrencies has long been cited as a hindrance to large scale adoption of crypto. 

The report specifically spoke about mitigating the illicit financing and national security risks posed by the illicit use of digital assets. “It also directs agencies to work with our allies and partners to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks,” the statement said.  

The order by Biden has set a 180-day deadline for its government to come up with reports on how cryptocurrencies will pan out in the financial landscape.   

In terms of the CBDC, the order asked the officials to continue R&D into the US CBDC. “This effort prioritises US participation in multi-country experimentation, and ensures US leadership internationally to promote CBDC development,” the statement said.