Joe Biden. Source: A screenshot, Instagram/potus
American crypto traders and investors are likely to face a new raft of regulations after the United Stated President Joe Biden issued an Executive Order entitled: “Ensuring Responsible Development of Digital Assets.” The document seeks to create a framework of stricter and – some argue – more coherent regulations for the crypto sector.
But while some have feted the order, calling it “sober” and claiming that it will bring new legitimacy to the industry, as well as add a spirit of fairness, others claim the document is lacking in key areas. Some claim that it focuses too much on central bank digital currencies (CBDCs), tokens which for the most part do not even exist yet.
The document explains that the government “must reinforce the United States’ leadership in the global financial system and in technological and economic competitiveness,” a measure that includes “the responsible development of payment innovations and digital assets.”
It also calls on a plethora of government agencies to report back to the executive with their proposals on how to govern the sector and create customer protection protocols, demanding reports within 90-180 days.
Congressman Tom Emmer took to Twitter to opine that “it’s imperative that we develop a strategy to foster innovation” in the crypto and blockchain sectors. But he claimed that if observers were to “read between the lines,” they would realize that there was a distinct lack of mention of decentralization.
“[The order] doesn’t mention decentralization once. The disintermediation of our economy will enable all Americans, regardless of circumstance, to decide their futures, not a bank or Big Tech or the government.”
He also hit out at the CBDC focus, explaining that placing the “highest urgency” on CBDC reporting was problematic. Emmer wrote:
“Any commonsense analysis of a potential United States CBDC that is not open, permissionless, and private would illuminate that the very idea is an entire non-starter and a disservice to Americans.”
The Congressman also took a swipe at the Securities and Exchange Commission (SEC)’s head Gary Gensler, writing that it was “most fortunate” that the order “doesn’t ask the SEC to weigh in,” as Gensler “has spent the past year intimidating crypto innovators and entrepreneurs with his unproductive regulation by public statement and enforcement action.”
The crypto pressure group Coin Center also had its say, with Peter Van Valkenburgh, the center’sDirector of Research, putting a positive spin on matters, claiming that “all in all,” the order was “good stuff.” He claimed that wrinkles could be ironed out by “educating and briefing” agencies, but claimed: “That’s what we love to do.”
The center’s head Jerry Brito was equally positive, explaining that the order was “further affirmation that when serious officials take a sober look at crypto,” their reaction “was not to light their hair on fire, but instead to recognize it as [an] innovation that the United States will want to foster and lead while mitigating obvious risks.”
But not everyone was singing from the same hymn sheet.
While the Head of Policy at the Blockchain Association Jake Chervinsky called the order a “fine start,” many in the thread below his post disagreed.
One called the order a “nothing burger,” while another claimed that “the policy language” in the order gave her “the opposite reaction.”
Others expressed skepticism about the CBDC focus, with one commenting:
“The United States was founded on decentralization of power. Centralization of a digital currency is a bad thing for people who don’t like government running your lives.”
Gensler, meanwhile, also waded into the discussion, writing that he was looking forward to “collaborating with colleagues across the government to achieve important public policy goals.”
Some, though, were distinctly unimpressed by his sentiments, opining that the SEC had bigger fish to fry in the sphere of conventional finance.
Others ramped up the irony, referencing the SEC’s ongoing legal struggle with the executives of the US-based fintech firm Ripple.