In Brief:
- The U.S. government is preparing to release an initial government-wide strategy for digital assets as an executive order.
- The order is said to be released in February.
- Federal agencies are tasked to study the crypto market and provide recommendations on their oversight.
The Biden administration is planning to release an initial government-wide strategy for digital assets in February. The U.S. government is prioritizing to draft executive order for federal agencies, which would assess the risks and opportunities associated with the crypto industry to provide recommendations.
According to the report, the order would include agencies to carve out roles for everyone from the State Department to the Commerce Department. The involved agencies would study several aspects of the crypto market, and the order will clarify the roles each agency would play to provide regulatory guidance.
The directive, which would be presented to Biden in the coming weeks, puts the White House at the forefront of Washington’s efforts to regulate cryptocurrencies. Federal agencies have been handling digital assets over the past several years, now Biden’s team is focusing to take the lead.
The Financial Stability Oversight Council, a group that includes the heads of Washington’s top financial watchdogs, will also study the systemic impacts of digital assets. Another government report would look at illegal activities of virtual coins.
The U.S. is concerned that nations like China embracing government-backed cryptos could threaten the dollar’s dominance. With this new order, the U.S. government plans on expanding its efforts to study and regulate the roughly $2 trillion digital asset sector. It will ensure that the U.S. remains competitive as the world increasingly adopts digital assets.
The concern over crypto regulation arose at a time when more and more people are taking interest in the volatile crypto market. The final draft of the executive order focuses on economic, regulatory, and national security challenges posed by digital assets such as cryptocurrencies. Consequently, reports from the involved agencies would be analyzed in the second half of 2022.
The directives in the order would be further revised before it’s finalized, as per people familiar with the matter.
