The United States’ Crypto Economy Is Fueled By President Joe Biden’s New Executive Order On Digital Assets
President Biden signed an Executive Order on Wednesday to ensure the responsible development of digital assets in the United States. The Order serves as a framework for a number of research aimed at guiding and understanding technology that is still relatively new but rapidly evolving.
From November 2016, when the market valuation was $14 billion, to November 2021, when it reached $3 trillion, the digital asset industry has grown at a rapid pace. With the new social challenges that the United States is facing, such as the threat of ransomware and sanctions evasion, the crypto sector has been open to what looks to be a very analytical approach calling for investigations by various US authorities.
In an interview with Neil Cavuto on Fox, Brett Harrison, President of FTX.US, hinted that this method could lead to institutional money streaming into the crypto market. “A certain amount of regulation is necessary to allow institutions to come in and feel comfortable investing in this nascent industry like cryptocurrencies,” Harrison added. “…a call for people to perform research and come back with studies to determine what areas need control and what areas don’t,” Harrison said of the Order.
TRM Labs’ Head of Legal and Government Affairs, Ari Redford, described the Order as a method for the US government to coordinate its crypto-related efforts. “Rather than engaging in fragmented work streams, the executive order is actually a call for coordination – playing quarterback to ensure that regulators are working together to feed into a clear and uniform framework for crypto regulation.” “Now is when the real job begins,” Redford explains.
The Order, according to Teana Baker-Taylor, Chief Policy Officer of the Chamber of Digital Commerce, is a reinforcement of the crypto economy, which is currently booming. “The EO reaffirms the Administration’s recognition that crypto is here to stay, and that the US government takes digital assets seriously,” Taylor added. She also discussed the advantages of a crypto regulatory regime for the development of the crypto economy. “We expect the next several years to be focused on building a regulatory system, which we all agree is vital to sustaining business growth while providing consumer safeguards and retaining US competitiveness,” Taylor added.
The “embrace of bitcoin” is Redford’s major takeaway from the Order. “The Order discusses the importance of American leadership in the digital space race, as well as the strength and promise of financial inclusion and the burgeoning crypto economy. “Of course, there is a focus on the risks and challenges, as there should be,” adds Redford, “but it is framed by the need for intelligent regulation and leadership.”
A ‘whole-of-government approach’ is critical in the Executive Order, which for the DavisPolk legal firm appears to have produced a lot of interest surrounding the timeline of when the reports in the Order are due. In addition, the Order examines a variety of aspects of digital currency’s potential implications, with a focus on ensuring readiness for a central bank digital currency (CBDC) if necessary. “I believe that a ‘whole of government’ strategy has the ability to actually move the needle on regulatory clarity, stimulate adoption, and possibly, just maybe, dilute some of the counter-narratives that the industry has been subjected to by its doubters,” Taylor adds.
Crypto as an industry is accustomed to being contrarian, but embracing itself as the leader of a new economy, not only to the interests of the Administration, but also to how institutional investors may view the opportunities of the crypto economy, may take some time for those in the industry to get used to.
Overall, the drafting of this Order is advantageous to the industry and, at the very least, demonstrates the US government’s attempt to take a consistent and equitable approach to crypto across the administration. Taylor mentioned how the Digital Chamber has been lobbying at the highest levels of the Administration for this type of approach by the US government.
“We are encouraged to see that many of the tenets outlined in our 2019 ‘National Action Plan for Blockchain,’ which calls for a holistic, coordinated approach to the development of policies and frameworks,’ were represented in the announcement,” Taylor said.
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