Biden signs executive order on US government cryptocurrency assessment
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Biden signs executive order on US government cryptocurrency assessment

US President Joe Biden signed an executive order Wednesday calling for the first ever, whole-of-government approach to addressing the risks and benefits of cryptocurrency.

Cryptocurrency is a digital asset based on a decentralized network rather than some central authority, like the US Central Bank. Cryptocurrency first emerged in 2009. However, it has since become one of the most hotly traded assets in the global market.

According to a White House fact sheet, the Executive Order on Ensuring Responsible Development of Digital Assets focuses on seven key areas: consumer protection, financial stability, illicit finance, financial leadership, equitable access, responsible development and the potential for a US Central Bank digital currency.

Domestically, the executive order seeks to protect consumers and provide financial stability to the emerging market. To protect consumers, Biden proposed that the Department of Treasury, along with other agencies, will create policies to address the growing digital asset sector.

The order also encourages greater regulation to safeguard against any risks posed by the new sector. To promote financial stability, Biden called on the Financial Stability Oversight Council to identify and mitigate any potential threats posed by cryptocurrency. The Financial Stability Oversight Council is a division of the Department of Treasury which identifies and responds to emerging financial threats.

On the world stage, the executive order seeks to promote US financial leadership and ensure responsible development of cryptocurrency. In the order, Biden called on the Department of Commerce to establish a framework to ensure that the US remains competitive and leads the global cryptocurrency market. To promote US leadership, Biden called on US government agencies to study and support advances in the development, design and implementation of cryptocurrency. Part of this initiative includes exploring the potential for a US Central Bank digital currency.

At the same time, Biden called on all US government agencies to develop a framework to address and prevent illicit use. US agencies are also called on to work with international allies to ensure a proper framework is in place to respond and prevent illicit financial transactions.