2022-03-10
It is the starting signal of a new era for cryptocurrencies - and has been long awaited. After months of discussions about the opportunities and threats of the blockchain industry for the United States, US President Joe Biden this Wednesday signed an executive order regulating the crypto space. "The United States must maintain its technological leadership in this rapidly growing field, encouraging innovation while mitigating risks to consumers, businesses, the broader financial system, and the climate," the order reads. A "holistic, whole-of-government approach" is being taken, a White House official said at the press conference.
As a basis for a future legislative framework, different government agencies are to conduct studies on the topic of cryptocurrencies within nine months. These concern, for example, consumer and investor protection, financial crime and the evaluation of risks for the global financial market through crypto. The introduction of a digital dollar as a stablecoin is also being discussed. The Biden administration has not yet taken any concrete measures with the decree.
The crypto space reacted bullishly to the move. A price rally already began in the night to Wednesday, starting with a statement from the Treasury Department on the decree that was accidentally published too early. In it, US Treasury Secretary Janet Yellen praised the decree as "historic". Bitcoin was already up eight per cent in the morning compared to the previous day, with several billion flowing into the market. Leading figures in the crypto space also reacted positively to the statement, for example Cameron Winklevoss. The co-founder of the crypto exchange Gemini praised the "constructive approach to thoughtful crypto regulation" on Twitter.
"For years, a lack of regulatory clarity has hampered the crypto market in the US," Hayden Hughes, chief executive officer of social media trading platform Alpha Impact, said in a statement on Wednesday. "Clear guidelines could be a turning point for the industry." The lack of a regulatory framework also repeatedly leads to legal disputes - such as between Ripple and the Securities and Exchanges Commission (SEC).
Just a few days ago, the SEC also fined the crypto-lending platform BlockFi 100 million US dollars. The company was found to have distributed securities illegally. Discussions about regulation picked up especially after the start of the Ukraine war. Some feared that Russia could circumvent Western economic sanctions with cryptocurrencies. So far, this cannot be confirmed on a broad basis. In the wake of this, US politicians called on the operators of the largest centralised crypto exchanges such as Coinbase and Binance to block Russian accounts in recent days.
"Clear guidelines could be a turning point for the industry." says Hayden Hughes
Some experts warned ahead of the decree of the potential dangers of US government intervention, including Richard Gardner, CEO of Modulus, a leading US technology company. The Biden administration, he said, was usurping the power to "shut down or alternatively tax alternative payment mechanisms." Gardner also fears that the Federal Reserve System (FED) is seeking "complete control" over global monetary policy and privacy with the introduction of a digital dollar.
One thing is certain: the presidential decree will further fuel the bitter battle over crypto legislation in the US. "This is the go-ahead," an anonymous insider told Politico in the run-up. Capitol Coin yesterday unveiled a study that said, "The number of crypto lobbyists in Washington has tripled since 2018. Lobbyists include former high-ranking government officials, from both the Trump and Obama administrations. The leading crypto exchange Coinbase, the blockchain company Ripple and the Blockchain Association are each said to have spent over two million US dollars a year on their interests in Washington.
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