According to anonymous sources, the President of the United States Joe Biden prepares an executive order for the regulation of cryptocurrencies. In the president’s view, it is a “national security issue” for the US.
The administration of Joe Biden wants to clarify once and for all the regulatory landscape around cryptocurrencies and, at the same time, exert greater control over the sector. With the executive order, federal agencies are expected to undergo changes in the level of priority with which they treat cryptocurrencies.
An executive order declaring the regulation of cryptocurrencies, that is, it does not pass through the country’s Congress. In this sense, the memorandum would have the role of coordinating the activities of the various federal agencies.
A Holistic View
According to the US portal Barron’s, the national security memorandum would essentially seek to achieve coordination between all the branches of government, in order to distinguish and limit the competences of each of the entities involved.
Currently, there are several conflicts regarding the performance of each federal agency. These conflicts mainly involve agencies responsible for tax and regulatory market issues, such as:
- US Internal Revenue Service (IRS);
- Futures and Commodities Regulatory Commission (CFTC);
- US Securities and Exchange Commission (SEC);
- Office of the Comptroller of the Currency (OCC).
Each of these agencies issued various statements that affected the cryptocurrency industry. On several occasions, these statements did not have any coordination with each other. As a result, the agencies worked separately on very similar schedules.
To avoid this conflict and its attendant inefficiencies, the anonymous source told Barron’s that Biden and his advisers want to achieve unity of thought. Thus, the Democrat intends to achieve something that previous administrations failed to achieve.
“This is designed to look holistically at digital assets and develop a set of policies that give coherence to what the government is trying to do in this space.”
Although it is the prerogative of the president, Biden will not do the drafting of the executive order alone, but will have the support of several agencies. All bodies below will be convened to issue guidelines to regulate cryptocurrencies, stablecoins and non-fungible tokens (NFT).
- Department of State;
- Treasury Department;
- National Economic Council;
- Council of Economic Advisers;
- White House National Security Council.
And the executive order is not intended to be restricted to the US, as international relations are included in this matter. The source noted that the Biden administration believes it is necessary to work with other countries “in synchronizing” these rules.
Can Order Negatively Affect Cryptocurrencies?
Joe Biden’s efforts to control the cryptocurrency ecosystem have been viewed with suspicion by market enthusiasts and entrepreneurs. These groups saw the Infrastructure Bill being discussed last year and fear the executive order will bring the same problems.
This project aimed to regulate the cryptocurrency sector in the US, but it brought a series of problems. In practice, it could make it impossible for decentralized wallets, decentralized finance (DeFi) protocols and other market companies to function properly if they were considered brokers.
Another source of concern is the America COMPETES Act, which is potentially dangerous for the cryptocurrency industry. As Coincenter’s Jerry Brito explained, the bill would give the Secretary of the Treasury unlimited unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.