Here's whats in Vice President Joe Bidens executive order on cryptocurrency.
On Wednesday, U.S. President Joe Biden issued an executive order directing the federal government to investigate the dangers and advantages of cryptocurrencies.
It's taken a long time for this to happen, and the crypto industry has been waiting for it, not least because of mounting regulatory concerns throughout the world about the young digital asset market.
There had been indications that there was a schism between the two, White House officials and Treasury Secretary Janet Yellen, which had caused the policy's implementation to be delayed.
The bitcoin market learned about the executive order overnight after the Treasury unintentionally issued a statement calling it "historic" and leaking specific facts ahead of time.
According to a White House fact sheet, the order was signed on Wednesday and requires government agencies to implement a unified approach to regulating and monitoring digital assets.
The following are the most crucial elements to keep in mind.
Consumer protection
Six critical areas will be addressed by the actions outlined on Wednesday:
Investor and consumer protection
Stability of finances
Illegal activities
Global competitiveness of the United States
Inclusion of financial resources
Innovation in a responsible manner
The guideline places a strong emphasis on consumer protection. There have been several reports of investors falling prey to cryptocurrency scams or losing large quantities of money due to cyberattacks on exchanges or users.
The Biden administration has asked the Treasury Department to analyze crypto and make policy suggestions. According to the report, regulators should also "provide proper control and safeguard against any systemic financial risks presented by digital assets," according to the report.
While governments have been careful to dismiss any systemic dangers associated with cryptocurrency, worries about the role of stablecoins have grown. These are digital tokens that are supposed to be tied to actual currencies like the U.S. dollar.
Tether, the world's largest stablecoin, has drawn the wrath of authorities amid claims that its token is not correctly backed by dollars kept in reserve. Tether claims that its coin is completely backed, although its reserves consist of short-term financial liabilities such as commercial paper, not only cash.
Stablecoins were noticeably omitted from the White House announcement on Wednesday, despite Yellen's stated desire for Congress to provide legislation for the industry.
The White House statement includes wording aimed at giving the United States a competitive advantage over other countries when it comes to crypto development; this is especially important now that cryptocurrencies have been essentially outlawed in China.
The Department of Commerce has been entrusted by Biden with "creating a framework to advance U.S. competitiveness and leadership in, and exploiting digital asset technology."
Several crypto industry leaders, including the CEOs of Coinbase, Kraken, and the Winklevoss twins' Gemini exchange, have urged for such action.
According to the Blockchain Association, Biden "has the chance to assure America stays the world leader for technical innovation for years to come," which represents several well-known crypto firms.