President of the United States of America, Joe Biden has finally signed an executive order to address the growing adoption of cryptocurrencies in the country. The first-of-its-kind executive order, released on Wednesday, outlined six measures that the U.S. government would take to ensure “responsible innovation in digital assets.”
The executive order requires that government agencies such as the U.S. Treasury Department develop policy recommendations focused on protecting U.S. investors and businesses engaging in the cryptocurrency industry. Such recommendations would also focus on giving regulators sufficient oversight and safeguarding against systemic financial risks associated with crypto assets.
Today’s executive order also encourages relevant regulatory agencies to combat the use of cryptocurrencies for illicit finance and other activities that pose a threat to national security. There are also calls for U.S. agencies to collaborate with international bodies to ensure a highly coordinated approach to mitigate the risks of illicit use of cryptocurrencies.
Another key priority identified in the presidential order on cryptocurrencies is the need for regulators to foster responsible innovation, while ensuring that the U.S. maintains its leadership position in the global financial system. The order advised that the U.S. Department of Commerce establishes a framework to “drive U.S. competitiveness and leadership in leveraging digital asset technologies.”
Lastly, the executive order recommended that the U.S. explore the creation of a central bank digital currency (CBDC). It encouraged the U.S. Federal Reserve to continue researching the potential for a CBDC and eventually issue one if it is “deemed in the national interest.”
Crypto Market Leaps in Reception of Executive Order
The long-awaited executive order has weighed on the crypto market in recent weeks, with short traders betting on unfavorable policies that could harm the emerging industry. Hence, it was not entirely surprising to see the crypto markets recover rapidly in the hours after the executive order on cryptocurrencies was made public.
The crypto market gained over $100 billion, pushing the price of Bitcoin back above the $40,000 mark for the first time since last weekend. The leading cryptocurrency is trading just below $42,000 at the time of writing, with many altcoins also in the green.