One of the most-commented topics in the crypto industry in the past several days was the signing of Joe Biden’s 82nd executive order since being sworn into office in January 2021. The executive order actually opened the door for U.S. policymakers to address a regulatory framework for digital assets.
The White House announced the executive order signing on March 9, stressing that non-state-issued digital assets reached a combined market capitalization of $3 trillion, up from approximately $14 billion in early November 2016.
In the order, President Joe Biden stressed that the United States has to place the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.
The need for central bank digital currencies became evident after China, Sweden, as well as several other countries started working on creating a digital legal tender, with China leading the race – the Chinese state authorities already deployed several working pilots.
For the executive order to have any form of success, however, many of the U.S. policymakers have to provide reports, according to their fields of competence.
For instance, the U.S. President gives the Secretary of the Treasury 180 days to bring forward a detailed report about the future of money and payment systems, including the conditions that drive the broad adoption of digital assets. Biden also wants to see the extent to which technological innovation may influence these conditions, as well as the implications for the United States financial system, and would a possible CBDC project in the U.S enhance economic growth, financial inclusion, and national security.
Almost all federal agencies must take part in the reporting program, the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and other Federal regulatory agencies.
Joy in crypto land
Many crypto enthusiasts and businesses in the United States urged Biden’s administration to provide at least some regulatory framework for clearing out the status of digital assets in the United States since there are still crypto projects that are evaluated under The Securities Act of 1933. The result – over two years of legal battles between the SEC and cryptocurrency projects like Ripple (XRP) and Pavel Durov’s Telegram ICO.
Meanwhile, National Economic Council director Brian Deese and National Security advisor Jake Sullivan commented that the ongoing war conflict between Russia and Ukraine, the imposed sanctions, and the possible use of cryptos to dodge the SWIFT exclusion may have pushed Biden into signing the executive order sooner than expected.
“The approach outlined in the E.O. will reinforce U.S. leadership in the global financial system and safeguard the long-term efficacy of critical national security tools like sanctions and Anti-Money Laundering frameworks,” Deese added.
Deese’s words were echoed by Circle’s CEO Jeremy Allaire, who noted that the executive order is the right way for communicating with the crypto sector in tailoring a proper regulatory framework.
“For those of us in the crypto community, IMHO this E.O. should be viewed as the single biggest opportunity to engage with policymakers on the issues that matter. The proverbial doors of policymakers are WIDE OPEN, this is now a NATIONAL conversation in the U.S.” Allaire concluded.
Ups and downs for cryptos
The executive order signing made crypto-related stocks rapidly spike in prices. For instance, Coinbase surged up 10.5% at market close, while the shares of Michael Saylor’s MicroStrategy posted a 6.4% gain. Blockchain-related exchanged-traded funds (ETFs) also got a price boost, with ProShares Bitcoin Strategy ETF gaining 10% and Valkyrie Bitcoin Strategy ETF closing up 10.3%.
Meanwhile, publicly listed crypto mining companies made the largest price jumps, as Riot Blockchain Inc. shares are up 11.2% and Marathon Digital Holdings Inc. is up 13.5%.
And, despite the crypto sector seemingly receiving a fresh wave of interest, that’s not the case with cryptocurrencies, as the market plummeted, erasing all of its weekly gains. Bitcoin is down 8% in the past 24 hours, extending to a 12% weekly loss. Bitcoin’s price behavior translated onto the entire crypto sector, with over $10 billion shrinkage in total market capitalization.