President Joe Biden has issued an executive order calling on agencies to investigate cryptocurrencies and digital assets, paving the way for a US-backed digital currency.
Cryptocurrency has been a controversial topic for governments around the world. Some have tried banning it, viewing it as a threat to their national currency, while others have embraced it, even going so far as to make Bitcoin legally accepted tender.
The US has not yet established an official policy, leaving many crypto miners, traders, and investors uneasy about its future. President Biden’s executive order should help pave the way toward a more stable future for the technology, especially given the support his order signals for central bank digital currencies (CBDCs).
My Administration sees merit in showcasing United States leadership and participation in international fora related to CBDCs and in multi‑country conversations and pilot projects involving CBDCs. Any future dollar payment system should be designed in a way that is consistent with United States priorities (as outlined in section 4(a)(i) of this order) and democratic values, including privacy protections, and that ensures the global financial system has appropriate transparency, connectivity, and platform and architecture interoperability or transferability, as appropriate.
The news is likely to be met with praise and criticism. On the one hand, President Biden is clearly signaling a greater degree of oversight for digital currencies and assets. For many, that is an unwelcome development, especially given the decentralized nature of digital assets. On the other hand, greater oversight will make it more difficult for scammers to take advantage of the tech, something that currently scares away some investors and gives crypto a bad name.