BIDEN : EXECUTIVE ORDER REGULATE CRYPTOCURRENCY?

The directive will ask federal agencies to determine the risks and opportunities posed by digital assets.

Before U.S. President Joe Biden signed the Infrastructure Investment and Jobs Act into law in November, many groups spoke out against a provision that broadens the tax code’s definition of “broker.” But there is another hidden cryptocurrency provision in this new law that amends part of the tax code in a way that will greatly expand financial surveillance, criminalize certain cryptocurrency transactions and, in my view, violate the Fourth Amendment of the U.S. Constitution.

The directive would place the White House in a central role overseeing efforts to set policies and regulate digital assets, Bloomberg reported.

Federal agencies have already been studying or providing regulatory guidance around the digital asset sector for years.

The Office of the Comptroller of the Currency (OCC), Securities and Exchange Commission and Commodity Futures Trading Commission have issued guidance letters, informal statements, and public rule-making efforts to direct how different aspects of the crypto industry should comply with federal law. But these efforts have not been coordinated in a single document or by one agency.

Biden Administration senior officials have met multiple times to discuss the directive, which will be presented to the president in the next few weeks, according to Bloomberg.

The Biden administration reportedly is preparing an executive order concerning cryptocurrencies, to be issued as early as sometime in February 2022. In preparation, various federal agencies are assessing the risks and opportunities posed by digital currencies, and senior administration officials have held a series of meetings on the matter, sources indicate.1

The news about the executive order emerged a day after the Federal Reserve Board (FRB) released a discussion paper that explores the pros and cons of creating a central bank digital currency (CBDC) for the U.S., which seeks public comment through May 20, 2022. The White House apparently is looking to seize the initiative, taking a central role in setting U.S. government policy on cryptocurrencies.

Federal agencies reportedly have been studying digital currencies and possible policy and regulatory responses to them for several years, but not in a concerted and coordinated fashion. Meanwhile, this fragmented effort and the attendant lack of clarity about the overall direction of U.S. policy have been a source of frustration to participants in the growing cryptocurrency market. Also, some observers are concerned that decisions by other major nations to issue CBDCs may threaten the dominance of the U.S. dollar in the global economy.

KEY TAKEAWAYS

1. The Biden administration reportedly is preparing an executive order regarding cryptocurrencies.
2. Key goal of the order is to develop a coordinated policy response from all agencies and departments within the U.S. federal government.
3. Maintaining U.S. leadership in the global economy is another goal.
4. The order may be issued as early as February 2022.
5. News about the order came a day after the Fed released a report on the pros and cons of creating a U.S. central bank digital currency (CBDC).