US executive order on crypto: What does it mean?

Governments around the world are beginning to formulate and adopt a regulatory framework for the governance of cryptos, and the US has become the latest to do so. President Joe Biden put out an executive order on 9 March 2022 calling on the government to examine the risks and benefits of crypto assets.

The order from one of the most powerful countries comes at a time when the number of Crypto users and platforms like CoinSwitch is growing at an exponential rate in India. So it is important for all of us to make sense of the order.

Key Takeaways of the Executive Order

The executive order addresses a wide range of issues related to the crypto sector. Let’s try to understand the details.

Consumer and investor protection. The order mainly focuses on protecting US-based people and businesses that interact with virtual digital assets. It also formulates a policy for cross-border trade and ensures that US policy is consistent with its allies.

Illicit activity. Another major focus of Biden’s executive order is abolishing illegal crypto activity. The aim will be to look into crypto’s use in financial crimes, including scams, its use in illicit finance and its environmental impact.

A digital dollar? The Biden administration wants to explore the possibility of creating a digital version of the dollar, a CBDC (Central Bank Digital Currency) for the US. He urges the government to make CBDC research and development a “top priority.” It is still uncertain whether the US will eventually launch some kind of digital currency, but if it does happen, it will change the entire narrative of virtual digital assets.

The Significance of Biden’s Order for the US
Biden’s executive order is a historic move because:

• It’s the first time the White House has formally weighed in on cryptos, and the tone of the order signals positivity. It indicates the government’s openness to the up-and-coming blockchain and its underlying technologies—which has left many buyers happy. The fact sheet of the order even suggests that the US “must maintain technological leadership in this rapidly growing space.”
• The order sets the stage for regulatory clarity. It is seen as a neutral take on crypto assets in general, and both the promise and the problems of cryptos are addressed.

The Significance of the Executive Order for the World
Broadly speaking, the executive order focuses on creating a safe and secure environment for Americans. So why should crypto users around the world care? Simply put, the answer is that the US has a strong connection with the crypto industry, and that has ramifications globally. Here are a few facts to help you understand the issue:

• New Bitcoin mining hub: For a long time, China was the largest crypto miner. But according to a study by the Cambridge Centre for Alternative Finance which tracked the IP addresses of “hashers,” most Bitcoin mining taking place in 2021 could be traced to the US. The US crypto industry now controls 35% of Bitcoin’s mining capacity.
• Growing number of crypto users: Crypto adoption was initially more common in underdeveloped countries in Asia, Africa, and Latin America, but the developed world is warming up to crypto assets in recent times. According to the Crypto Perception Report 2022 by the Huobi Group, most crypto buyers in the US made their first crypto purchases in 2021.
• Home to the world’s largest crypto platforms: The US is also home to some of the world’s largest crypto platforms like Coinbase which help buyers and sellers of crypto assets to conduct their transactions with ease.

The latest development is thus a win not just for the crypto users of the US, but for all crypto enthusiasts because the regulatory framework of a country so involved in crypto assets will impact the entire crypto market. Bitcoin has already jumped 9% after Biden signed the executive order.

Wrap-Up
The big questions that now remain to be answered are whether the executive order will help the US establish itself as a leader in the years to come, and what the next phase of crypto regulations by governments around the world will look like. Only time will tell.

While we wait to find out, if you want to be a crypto user, don’t forget to make your purchase from CoinSwitch, where the best rates are on offer on a very user-friendly app!

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