It’s welcome news that Bitcoin has risen in price by close to 9% after Joe Biden has signed an executive order “to establish the first-ever comprehensive federal digital assets strategy for the United States” which appears to show a constructive engagement with cryptocurrencies.
It’s also good news that the White House wants measures to protect American consumers on the one hand, while also directing the Depart of Commerce to create a framework that “drives U.S. competitiveness and leadership in, and leveraging of, digital asset technologies.”
In a similarly balanced approach, which seeks to safeguard against the risks while benefiting from the opportunities crypto provides, the order sees their utility in opening up financial provision, certainly a positive step. Indeed, the prematurely published statement from Treasury Secretary Janet Yellen aligns with this sentiment, suggesting these measures “could result in substantial benefits for the nation, consumers, and businesses.”
In 2021, many lawmakers failed to take additional steps in the cryptocurrency space, owing to a lack of critical legislative fundamentals and poor opinion polls.
Part of the problem is simply lack of legislative tools to do the job for such innovative assets. This has meant the SEC has been slow to crack down on rogue ICOs, using legislation designed for a pre-crypto era, while threatening to widen its scope based on its interpretation of how securities law applies to even new assets such as NFTs.
As a result, since Bitcoin launched in 2008 the US government has had to play catch up, for example in last December executives of eight major cryptocurrency firms were called to testify before the House Financial Services Committee, a US congressional committee. That was the first time crypto companies in the US have been questioned in that way and was well overdue considering the hype and scams around the ICO boom took place back in 2017/18.
Whether the regulatory policy in the field of crypto assets can be implemented in 2022 will also necessitate close collaboration among governments from across the world to develop a practical regulatory policy plan agreed by the majority of them. Indeed, the international aspect is mentioned in Yellen’s abortive reference to promoting international standards and “a level playing field”. What such a field means in practice is quite another thing, especially if the US gets to call the tune to the detriment of emerging crypto economies from Dubai to Gibraltar.
This point was also recently underlined with the economic sanctions against Russia, which were in part resisted by crypto exchanges. However, it’s noticeable that US exchanges such as Coinbase have started to fall into line by banning 25,000 Russian accounts. However, Coinbase is treading a fine line with the Biden administration by confirming it would not ban accounts for ordinary Russians.
The use of the SWIFT payments system to take down the Russian economy, which has pushed the Russian central bank into closer cooperation with the Chinese government’s own financial system has also reminded US lawmakers of the importance of work to create a US digital currency. The executive order is well timed therefore in tasking the Treasury Department in this respect, along with the Justice Department’s role in deciding on what new law would be required as a result.
What will be interesting too is how this plays out in the battles over privacy rights, in deciding what a digital US currency will look like, in the months and years to come.
Author:
Anndy Lian, Chairman of BigONE Exchange
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.