Next week, everyone expects President Biden to sign an executive order asking federal agencies to investigate central bank cryptocurrency and digital currency (CBDC) and develop a plan to regulate digital assets across the federal government.
That follows a report by The Wall Street Journal that suggests the President is considering using blockchain to simplify financial transactions. Companies and individuals need to know its potential implications as this technology becomes more widespread.
According to the New York Times, government officials say any new order will require various agencies, including the Departments of the Treasury, State, Justice, and Homeland Security, to assess the future evolution of money and payment systems. In addition, the Director of the Office of Science and Technology Policy is responsible for conducting a technical review supporting a CBDC system.
However, after Bloomberg News reported an “inaccurate” split between the Treasury and the White House regarding cryptocurrency regulation, a Treasury official denied this. As part of its broad effort to regulate the industry, the FBI created a new cryptocurrency section. An experienced computer crime prosecutor led them.
The order will also examine measures to protect investors, consumers, and businesses. In addition, the Treasury Department will prepare a report safeguarding against cryptocurrency risks in cooperation with these agencies.
Within 180 days, the Office of Science and Technology Policy is expected to present to the President a report on digital distributed ledger technology and its impact on the environment.
The government may also work with other countries to harmonize cryptocurrency regulations. For example, the Departments of State and Treasury, Commerce, and USAID will establish interagency participation with foreign counterparts in an International Forum to Accelerate the Adoption of Digital Assets and Harmonize Standards.
The Federal Reserve is expected to release a report on cryptocurrencies next week that will give authorities a better understanding of how they should be used and how they can be used to disrupt the financial stability of countries. If this report is accurate, it would mark a significant change in policy for the United States and lead to more cryptocurrency regulation. It is unclear exactly what will happen with this new policy. Still, it is likely to increase scrutiny of cryptocurrency and make it more difficult for people to invest in it.