Biden Administration Keen On Getting Crypto Rules As A Matter of National Security
An executive order from the White House is set in motion to bring order to regulate cryptocurrencies. The government-wide strategy could be expected by this February. Federal agencies will assess Bitcoin and cryptocurrencies risks and opportunities over the Federal Reserve's battle against inflation.
The White House took this measure due to concern for national security as currently, crypto legislation and its enforcement are spread across various sectors and agencies. The national security memorandum is intended to design a robust regulatory framework that would cover Bitcoin, cryptocurrencies, stablecoins, and NFTs, which will be laid out in the coming weeks.
The White House also plans to bring order to the disorganized approach that the government is now using to control crypto. At present different agencies supervise the industry, like the SEC and CFTC but due to no unanimity on subjects such as if some tokens are supposed to be registered as securities or how to handle exchanges, stablecoins, and high-yield lending products.
Meanwhile, the Biden administration is also encouraging Congress to draft rules. Last year in the month of November, the White House released a report on stablecoins, suggesting that Congress should act quickly to regulate the digital asset industry.
As per Barron's report, direct involvement of the State Department, National Economic Council, Treasury Department, Council of Economic Advisers, along with the National Security Council, will collate their efforts to measure the impact of cryptocurrencies "economic implications for national security."
An individual informed with the White House's plan told Barron's, "This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space."
The Biden administration has practically no intent to issue any personal recommendations. Instead, they directed government agencies to come forward with their own proposals in three to six months.
Then the White House would harmonize after analysis and act as a policy coordinator. The administration desires global involvement "because digital assets don't stay in one country, it's necessary to work with other countries on synchronization," said an informed individual to the Barron's.
In January, the Federal Reserve released a detailed report on CBDC's (central-bank digital currency) pros and cons of digitizing the dollar. Due to the executive order, the White House also has an opportunity to analyze it.
Other countries and top EU regulators are also considering crypto laws due to national economic security. This week, Russia's central bank said that BTC mining and trading activity should be regulated with more scrutiny. Meanwhile, regulators from the EU are insisting on a total ban on Proof-of-Work mining.