U.S. President Joe Biden may issue an executive order on crypto assets as early as this week, according to reports. Plans for an executive order were first reported in January with the expectation of a February release.
The executive order reportedly will direct a wide range of government agencies to study cryptocurrency and central bank digital currency (CBDC) to design a comprehensive strategy. Some of the agencies that will likely be asked to prepare a report include the Departments of Treasury, State, Justice and Homeland Security.
The Treasury Department already gave testimony last week in the Senate about the opportunities and challenges posed by stablecoins and the need to regulate this space. Similarly, Rostin Behnam, chairman of the Commodity Future Trading Commission (CFTC) also gave his testimony in a separate Senate hearing about digital assets and the role of the agency to oversight certain of these assets.
Biden’s executive order may be the trigger for several regulators and lawmakers to advance crypto asset regulations.
The Federal Reserve in January published a white paper about central bank digital currencies (CBDCs) where the central bank didn’t make policy recommendations but rather explained the benefits and risks of a digital U.S. dollar. However, the Fed stressed that it won’t take any decision “without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law,” per the white paper.
Last week, Lael Brainard, governor of the Fed, reiterated in a speech the idea that the U.S. should be ready for the financial system of the future, which may include a CBDC. Brainard’s speech didn’t move from the careful and cautious position adopted by the Fed to CBDCs, but it signals the need to work on this space and the executive order could encourage the Fed to continue this work.
See: Federal Reserve Governor Stresses the Importance of a US CBDC
In preparation for a possible regulation on cryptocurrencies, and to avoid any conflict of interest, the Federal Reserve approved new rules that became effective on Friday, banning Fed officials from owning individual stocks, bonds and other assets, which include cryptocurrencies. Under the new rules, officials holding these assets will have 12 months to sell them.
But federal agencies and the Fed are not the only ones paving the way for new crypto regulation. U.S. Rep. Warren Davidson introduced legislation in February to prohibit regulators from limiting the personal use of convertible virtual currency to purchase goods or services. Additionally, Congressman Josh Gottheimer released on Feb. 15 a draft of the Stablecoin Innovation and Protection Act of 2022, a piece of legislation that aims to define stablecoins and to offer a legal framework where stablecoin issuers could operate.
Read more: US Rep Introduces Bill to Protect Crypto Wallets
See also: US Draft Bill on Stablecoins Offers Safe Harbor for Issuers
An executive order may only start with an order to gather information from different agencies about consumer, business and investor protection measures, but it will likely kick off a larger coordinated effort among regulators to come up with a comprehensive crypto regulatory package.
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