- The White House executive order will bring more clarity of handling crypto regulations and the role of different agencies.
- The key focus shall be evaluating the risks and benefits with the use of crypto, stablecoins, and CBDC.
The most-awaited development in the crypto space could be ahead of us in the next week. As per the latest report, the White House will issue an executive order for crypto very soon. Meaning, the White House will direct the government agencies to study different aspects of the crypto market with the goal of creating a comprehensive regulatory framework.
On Thursday, February 17, Yahoo Finance’s Jennifer Schonberger, familiar with the matters within the Biden administration revealed that the executive order can arrive by the next week. Apart from focusing on the regulatory framework, the directive will ask the agencies to commission a study of the CBDC. The key agencies involved will be the Departments of Treasury, State, Justice and Homeland Security.
On the other hand, the Director of the Office of Science and Tech policy will do a comprehensive technical evaluation of things required to support a CBDC system. Thus, the focus here shall be on setting up the right infrastructure to support the Digital Dollar. The agency will further issue a report to the U.S. President in 180 days.
On Wednesday, February 16, Bloomberg News reported that the White House and the U.S. Treasury aren’t on the same page when it comes to crypto regulations. However, a Treasury official has disputed it as “inaccurate”. The administration is currently engaged in a wide range of efforts in regulating the crypto space. The FBI has also formed a new crypto unit to deal with crypto frauds.
Addressing the financial stability issues with crypto use
One of the biggest challenges for regulators with the use of digital assets is handling the financial stability of the overall system. Under the executive order, the Financial Stability Oversight Council (FSOC) would handle this matter. Furthermore, the President’s working group has already asked the FSOC to look into the risks associated with the use of stablecoins.
Treasury Undersecretary Nellie Liang recently stated that the Senate is evaluating risks that stablecoins pose. Also, the Treasury remains hopeful that Congress will act in this matter since it has limited authority and oversight.
Additionally, the Attorney General, along with the FTC and Consumer Financial Protection Bureau will focus on the impact that the growth of digital assets can have on the overall financial system. Simultaneously, the SEC, CFTC and Federal Reserve, FDIC and OCC, will weight the market protection measures within their respective jurisdictions.
Reportedly, the U.S. government is working to coordinate with other government agencies across the world. The goal is creating standardized rules for crypto and creating a framework for international use. All eyes will be on the executive order which will also give clarity to other nations as to how the largest crypto market, the U.S, will approach crypto regulations.
Related: DOJ launches National Cryptocurrency Enforcement Team (NCET), appoints former assistant US Attorney as Director