The Joe Biden White House is expected to issue an executive order in the coming weeks regarding actions the United States government will take regarding digital assets.
A source “familiar with the White House plan” told Barron’s that the executive order would be enacted in a national security memorandum. Biden’s memorandum would task some government agencies with investigating crypto, stablecoins, and non-fungible tokens with the goal of developing a workable regulatory framework.
The source was quoted as follows:
“The purpose of this is to look at digital assets holistically and to develop a set of guidelines that will bring coherence to what the government is trying to do in this area.”
Rumors of a potential executive order on crypto have been swirling for the past few days. Earlier this week, Forbes reported that these government agencies would likely issue reports on their findings by mid-2022 after looking at “the systemic risks of cryptocurrencies and their illicit uses.”
The reason the executive order falls under national security is because crypto is a cross-border tool for moving money. The ability of decentralized blockchain technology to bypass geo-specific surveillance or rules means the administration can push for synchronized international regulations with other countries.
Eric Balchunas, a senior exchange-traded fund (ETF) analyst at Bloomberg, noted earlier Friday that the Biden administration, which views crypto as a national security threat, may also be behind the ongoing rejection of Bitcoin (BTC) spot ETFs.
He also referred in a Friday tweet regarding the new developments as a “broader crypto crackdown.”
Another piece of legislation worrying the crypto industry was proposed by House Democrats on Tuesday, the America COMPETES Act. Jerry Brito, executive director of Washington DC-based think tank Coin Center, noted that a provision in the proposed bill would allow the Treasury Secretary to ban crypto exchanges from operating without prior notice.
2/ The determination of the so-called “special measures” (proposed by @jahimes) would essentially give the Secretary of the Treasury the uncontrolled and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions. How would it do that? pic.twitter.com/f3tVow9nxA
— Jerry Brito (@jerrybrito) January 26, 2022
Brito said he believed the law was likely to be passed “in some form”.
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Meanwhile, advocates among lawmakers are trying to smooth out the rough edges of laws that have already been passed. A bipartisan group of House officials has asked Biden-nominee Treasury Secretary Janet Yellen to clarify aspects of the infrastructure bill related to digital assets. The Infrastructure Act was signed last November amid some controversy as its definition of a “broker” is arguably too broad, encompassing miners, software developers, transaction auditors and node operators.
The group of bipartisan lawmakers proposed on Wednesday to limit the amount of information a broker can obtain to avoid creating “an unlevel playing field on transactions involving digital assets and those necessary to provide them.” Some brokers, as currently defined in the draft law, do not have the ability to verify information about senders and receivers of crypto as required by law. Yellen has not yet responded to this request.