The executive order that President Biden signed early Wednesday on the government’s approach toward cryptocurrencies is getting good reviews from both the crypto world and key government officials.
The crypto industry had been nervously awaiting some clarity from the government on how it would try to regulate the tech. After all, Treasury Secretary Janet Yellen has repeatedly expressed anxiety over the stability of the new currencies, and SEC chair Gary Gensler has called crypto a “Wild West,” where consumers are in danger of being misled and defrauded.
Biden’s E.O. is being taken as a harbinger of a crypto-friendly regulatory regime from Washington in the future. The order itself simply asks that government agencies work together to study the risks and benefits of digital currencies, then work together to establish a regulatory regime. (Yellen accidentally tweeted details of the E.O. before it was published early Wednesday, calling it “historic.” The tweet was quickly deleted.)
Later on Wednesday, the heads of White House offices that will have a big say in the government’s approach to crypto—National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan—put out their own statement on the executive order.
“The E.O. will help position the U.S. to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values, and advances U.S. global competitiveness,” the two wrote. “This E.O. marks an intensification of our efforts to promote responsible innovation in the digital assets space.”
The price of the leading cryptocurrency, Bitcoin, went up 8% on the news of the E.O. and Yellen’s response to it, and sits at +10% at the time of this writing. (Full disclosure: I own a modest amount of Bitcoin.)
Americans are mainly positive on the idea of cryptocurrencies, but are concerned about being defrauded because of lack of regulation. A survey from The Ascent, a Motley Fool service, found that one-third of Americans believe the government should regulate crypto. Among those who have actually owned some form of digital currency, 44% are in favor of regulation.
Indeed, crypto is rife with scammers looking to take advantage of crypto newbies, some of whom may suffer from FOMO. The Federal Trade Commission reported that Americans lost $419 million to crypto scams in 2020, a number that is sure to grow in 2021 (the totals have not yet been reported).
A bigger government role, done well, might de-risk the currency for a new wave of consumers and investors.