March 11, 2022

On Wednesday, March 9th 2022, President Joe Biden presented the Executive Order, which asked government organizations to produce reports around cryptocurrencies and blockchain technology. Many investors saw this as a sign that the U.S. government is finally conceding to the importance of the crypto industry.

In the report, the Biden administration called on the Treasury to begin assessing and creating policy recommendations regarding digital assets. It also asked regulators to “ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.”

As anyone with a passing knowledge of the space knows, scams and hacks are unfortunately a reality in the space. For this reason, the report focused on consumer protection, financial stability, illicit activity, U.S. competitiveness, financial inclusion and responsible innovation.

Furthermore, the Biden administration plans on looking into a digital version of the dollar.

Protect Against Illicit Activity

Illicit activity has become prevalent within the digital asset space, which is why it’s a primary focus of the executive order. (In 2021 alone, scammers stole over $17 billion Canadian in digital assets.)

Biden called for an “unprecedented focus of coordinated action” from federal agencies. It went beyond that to ask agencies to work in collaboration with allies in order to create international frameworks and partnerships to reduce the risks for illicit activity.

Environmental Impact

The amount of energy used by digital assets was also touched upon. Bitcoin’s electricity consumption sits around 129.24 TWh per year, equating to more than entire countries such as Argentina (which consumes 125.03 TWh each year).

Biden has requested that the government study methods of making digital assets “responsible” and reduce its environmental impact. 

U.S. Competitiveness

The announcement has pointed towards the United States’ desire to have a competitive edge over other countries regarding digital asset development. 

To accomplish this, Biden has tasked the Department of Commerce with “establishing a framework to drive U.S. competitiveness and leadership in, and leveraging of digital asset technologies.”

Digital Dollar 

The Biden administration is also looking to explore a digital version of the dollar.  It called to place “urgency” on research and development of a potential Central Bank Digital Currency (CBDC). The Federal Reserve has already began exploring the potential issuance of a digital dollar since last year. 

The Executive Order makes it clear that the U.S. is wanting to be the global leader when it comes to cryptocurrencies. However, as the report shows, it’s still very much in its early stages and many details still need to be ironed out. Regardless, it is an important milestone in recognizing and solidifying the industry, one that has been plagued by rumours that crypto would get banned in the country. 

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