Biden Administration To Publish Government Strategy On Crypto

The Biden Administration plans to release a government-wide strategy on digital assets as soon as next month, according to a report from Bloomberg.

Citing sources familiar with the matter, Bloomberg says that federal agencies have been tasked with weighing out the risks and benefits of digital assets in a series of meetings which will be used to issue an executive order.

Per the report, the late-stage draft of the executive order details “economic, regulators, and national security challenges posed by cryptocurrencies,” according to people who asked not to be named who are in participating in the deliberation. It would also “call for reports from various agencies due in the second half of 2022.”

Bloomberg says that one study would come from the Financial Stability Oversight Council, a top regulatory agency in Washington consisting of federal and state regulators, as well as an independent insurance expert appointed by the President. An additional government report will look at illicit use cases for “virtual coins.”

“Meanwhile, the directive would also require other agencies to weigh in -- carving out roles for everyone from the State Department to the Commerce Department. Some of those tasks will be meant to ensure that the U.S. remains competitive as the world increasingly adopts digital assets.

The administration’s plan, including the directives in the order, could be further modified before it’s finalized, the people cautioned.”

Bloomberg’s report highlights Washington’s continued effort to shine the spotlight on cryptocurrencies. Last week, the Federal Reserve released a highly anticipated report on digital assets detailing the pros and cons of central bank digital currencies (CBDCs), and the rise of digital money.

Though no direct positions were taken by the Fed, it did present a generally open-minded outlook on the digitization of the financial system.

“As such, [a CBDC] could provide a safe foundation for private-sector innovations to meet current and future needs and demands for payment services. All options for private digital money, including stablecoins and other cryptocurrencies, require mechanisms to reduce liquidity risk and credit risk.”