The question of what is going to happen in the next 210 days regarding the change in crypto arose when US president Biden gave a statement about the cryptocurrency.
Much of the financial sector greeted President Biden’s long-awaited executive order on cryptocurrencies with guarded optimism, but with so many crucial elements still unsettled, the ultimate result of the directive is far from assured.
The White House’s March 9 directive is the first occasion it has publicly chimed in on cryptocurrencies, and while it is just a proposal for the Treasury Department and other government regulators to come up with a strategy, it is nevertheless a historic moment.
It’s also a time when individuals can have a say in how legislation and policies evolve in the future. Industry representatives believe that crypto can help household members underrepresented by the financial system get a head start and more participate fully in the economic system, while technology platform proponents keep hoping that legislation will boost confidence (and inspire the US government to carefully contemplate its own digital money), while financial institutions hope for clear laws of the game and banking institutions hope for clear rules of the road.
What do authorities think about the US government’s statement about crypto?
“The truth will be in the specifics,” said Josh Lipsky, a senior director at the Atlantic Council who formerly served for Obama White House and counseled the International Monetary Fund. “To be governed is to be legitimized, therefore the issue is who will be on which side of that, and what will those rules seem like.”
The executive order was mainly well-received by crypto supporters. Rather than focusing primarily on the hazards, the executive order also highlighted cryptocurrency’s promise, assuaging some anxieties.
The decree is “another confirmation that the cyber ecosystem is becoming a key and integral element of the national business,” according to the Blockchain Association. Markets reacted positively to the announcement, with bitcoin values rising by roughly 10% on Wednesday before falling on Thursday.
And, for the most part, the crypto edict elicited a good response from Washington’s financial community. More government action on cryptocurrency would offer “clarification,” according to the Bank Research Council, which also praised the concept of incorporating crypto and financial businesses into a regulatory structure. “Governed financial firms have been caught on the wings awaiting for additional legislative changes before extending their technology infrastructure,” according to the trade organization.
Banks, on the other hand, were more hesitant about blockchain and digital money. Further study on US digital currency, according to the Bank Advisory Council, would indicate that “CBDCs would impose significant and inescapable expenses on the banking markets and industry while delivering few if any, demonstrable advantages.”
“It obviously urges government entities to begin seeking a central bank digital money even before evaluating if a U.S. CBDC is indeed ‘in the interest of the country,’ as the directive apparently demands,” American Bankers Association President and CEO Rob Nichols said in a release.
The next sections look at the short- and long-term consequences of the administration’s heightened attention on crypto.
Some authorities have a head start on the competition
Until far, regulators have adopted a patchwork approach to crypto law, with separate government agencies pursuing their own set of rules and goals.
The SEC has been the busiest, with Gary Gensler, a former MIT Sloan School of Management blockchain professor, emerging as Washington’s proto-expert. He compares cryptocurrency rules to the Wild West, and digital assets to the automobile industry, which he believes became profitable only after severe regulation.
According to Todd Phillips, director of banking regulation and company management at the Center for American Progress, a powerful left-leaning research institute, the executive order shows that the Biden administration “recognizes that regulators have established authority to get their weapons around digital currencies.”
Until recently, the SEC’s approach to software assets has been through its supervision position. Ripple Labs and two of its managers have been charged with breaching investor privacy legislation by the SEC.
In the first criminal prosecution against a crypto credit facility, the SEC also imposed a $100 million punishment on BlockFi Lending for allegedly violating international investment rules.
At the time, Gensler stated, “Today’s agreement clearly indicates that cyber exchanges must conform with time-tested financial rules.”
While Gensler has fought for the cryptocurrency business to be included in the present legal regime, he has also urged Congress and the federal government to take a more comprehensive solution.
In September, he declared in written remarks before the Senate Committee, “I am technology-neutral.” “I believe this innovation has been and will remain a source of motivation, but technologies that operate beyond the regulatory framework do not live long.”
Rostin Behnam, Chairman of the Commodity Futures Trading Commission, has also attempted to establish a position in the bitcoin monitoring and regulatory sector. Behnam requested an extra $100 million to his agency’s $300 million yearly budget in a February appearance before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.
Nothing definitive can be said about what will happen in the cryptocurrency world in the next 210 days because the volatility of cryptocurrencies makes them completely unpredictable. However, the positive statement of Biden regarding the utilization of cryptocurrency by the US authorities has made the people quite optimistic. Still, there are many unclear elements.
One sure thing is that it will provide an equal playing ground for financial institutions. The regulatory certainty that a government-wide review of digital assets would provide is one of the most significant benefits for the banking industry.
While the order’s exhortations are not the responsibility of the Biden Administration, they are 14 years late in attempting to provide the rationale, safety, and consistency to an uncontrolled industry that is now worth more than $10 trillion when derivatives digital products and leverages are factored in.
Regulation is not a prerequisite for development. Regulated businesses are falling farther behind in this gap, which the president’s directive will attempt to fill.