The Biden administration’s executive order on crypto pushed for further research and development of a potential US central bank digital currency, called for an assessment of the necessary infrastructure needed for a CBDC and instructed the Federal Reserve continue its research in this area.
The crypto markets responded to US President Joseph Biden’s long-awaited executive order (EO) on cryptocurrencies with relief and frustration.
Many anticipated the EO would take a hostile tone or apply a regulatory sledgehammer to the crypto industry within the US. Instead, the EO cited the need to balance cryptocurrency risks and benefits, such as faster and cheaper payments, promoting greater financial inclusion and responsible innovation.
Biden’s EO also pushed for further research and development of a potential US central bank digital currency (CBDC), called for an assessment of the necessary infrastructure needed for a CBDC and had the Federal Reserve continue its research in this area.
The EO was deemed a “success” or “not totally negative” for the crypto industry. But for those hoping for more regulatory clarity, they were bitterly disappointed. Biden’s EO called on the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Federal Reserve to explore whether additional powers are needed to address cryptocurrency risks.
“The last thing the crypto world needed to hear from Biden was news of yet another ‘study,’ says Shane Rodgers, CEO of PDX Global and PDX Coin, a crypto-to-fiat payments project. “They’ve had years to ‘study’ the space, and now they’ll take years more while the rest of the world continues to lead in the space. My concern is that we still aren’t seeing the clarity we need as to which regulators will have oversight and over what.”
In 2020, the SEC took legal action against Ripple Labs, ruling that the $1.3 billion the company traded in its XRP cryptocurrency should have been registered securities. In February, the regulator also published a proposal for alternative trading services. SEC Commissioner Hester Peirce warned that it would allow the SEC to quietly increase its powers in probing crypto projects, including decentralized finance (DeFi) protocols.
Until the SEC is put in a tightly defined corner, the government can forget innovation in the crypto space in the US, according to Rodgers. “I, for one, will not be hiring any people or spending large amounts of R&D money in this country until and unless the SEC’s powers are reigned in.”