The cryptocurrency industry woke up to good news on Wednesday morning after President Joe Biden signed an executive order for regulators to review digital assets broadly. Rather than trying to ban them, the order indicates that the White House is interested in sensible regulations that will spur innovation.
Bitcoin (CRYPTO: BTC) jumped as much as 10.4% in the past 24 hours as of noon ET on the news, Ethereum (CRYPTO:ETH) rose 8.1% to its high, and Dogecoin (CRYPTO: DOGE) also increased by 6.4%. To exchange Coinbase Global (NASDAQ:CURRENCY) was also up on the news, jumping as high as 11.7% and currently trading up 9.4% on the day.
The main takeaway from today’s executive order is that the White House wants government agencies to consider the risks and benefits of digital technologies, such as blockchains and cryptocurrencies. This review includes the Treasury Department, the Financial Stability Supervisory Board, the Commerce Department, and the Federal Reserve, among others.
Agencies are expected to make policy presentations at the White House within the next 180 days, by which time they expect to recommend regulations fairly quickly. The process could still take months or years, depending on congressional action, but overall it appears the market is happy with the current executive order.
Although regulations are not welcome in most industries, the cryptocurrency industry has been operating in a gray area for a decade now. He is looking for policies that will set the rules of the game (so to speak) and ensure that tokens, non-fungible tokens (NFTs), and other digital assets are created legally. In that regard, I think it is overall a positive step.
I will point out that much of the executive order talked about central bank digital currencies, or CBDCs. It looks like the White House wants to at least explore the US central bank creating its own digital currency which would then compete or live alongside other cryptocurrencies. It is not yet clear what this means, but it is remarkable for the industry.
Overall, I see this as a positive sign for the crypto industry. Sensible regulation will allow industry to thrive and this executive order seemed to take on the tone of industry acceptance and a willingness to find ways to allow innovation to thrive. That said, we still have months or years to find out what the rules will look like.
After months of waiting for an executive order on cryptocurrencies, it’s finally here. This is what excites the market today, although it does not mean that there are definitive rules in sight. But sometimes talking about regulations or laws is enough to please investors, and that’s what we’re seeing today.
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