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Highlights
- The matter assumed urgency after the recent volatility in the cryptocurrency market severely hit the prices of Bitcoin, Ethereum and non-fungible tokens (NFTs).
- Bitcoin prices fell to around US$38,000 after soaring to an all-time high of around US$69,000 in November last year.
- According to people familiar with the White House plan, the directive is being read to holistically look at digital assets and develop clear policies in the crypto space.
The Biden administration might issue an executive order on cryptocurrencies as early as February, authorizing the federal agencies to determine the risks and opportunities posed by digital assets and take appropriate measures, according to media reports.
Unnamed sources cited by Bloomberg said the directive would place the White House in a supervisory role in efforts to set policies and regulate digital assets. Federal agencies have been studying the possible regulatory framework around digital currencies for quite some time now.
The US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, and the Office of the Comptroller of the Currency (OCC) had issued policy notes in the past on how different aspects of the crypto industry should comply with federal law. The agencies are expected to present their observations in a single document before Biden issues an executive order.
The matter assumed urgency after the recent volatility in the cryptocurrency market severely hit the prices of Bitcoin, Ethereum and non-fungible tokens (NFTs). Bitcoin prices fell to around US$38,000 lately after soaring to an all-time high of around US$69,000 in November last year.
Likewise, Ethereum, the second-largest cryptocurrency after Bitcoin, also saw wild swings over the past year. The NFT market, though, had risen to a whopping US$41 billion in 2021 despite volatility.
To protect the investors’ interests, given the unpredictability in the market, the Biden administration is weighing on an executive order that will provide a broad framework to work on the regulatory aspects.
Also Read: Hackers steal cryptocurrency worth US$80 million from Qubit Finance
Source: Pixabay
Also Read: Is taking salary in bitcoin becoming a new trend?
White House Plans
The White House National Security Council, the State Department, the Treasury Department, the National Economic Council, and the Council of Economic Advisers are also reportedly expected to get involved.
According to people familiar with the White House plan, the directive is being read to holistically look at digital assets and develop clear policies in the crypto space. The government will also work closely with other countries as the digital assets don't stay in one country.
The crypto market rose from US$200 billion in January 2020 to over US$1.5 trillion lately. The NFTs, primarily built on the Ethereum blockchain, also have become a lucrative revenue stream. Additionally, the adoption of bitcoin by countries like El Salvador and some corporates as an alternative mode of payment has helped popularize the cryptocurrency.
