Dear VIPs & Premium Members,
President Joe Biden has presented an Executive Order yesterday that asks various government organizations to produce reports on bitcoin, cryptocurrencies, and blockchain technology. This development signals that the United States government is officially recognizing the importance of this technology and the industry that it has spawned.
While many people have been anticipating an abrasive government approach towards bitcoin and cryptocurrencies for years, the current administration seems to be doing the exact opposite — they are looking to embrace this new technology and the potential positive impacts that it can have.
Arjun Kharpal of CNBC is reporting that an exact quote from the Executive Order says:
“The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate.”
The overall reaction from the market has been positive so far. The Executive Order appears to be a rational, measured approach to gathering more information in an attempt to ensure policy-makers are educated on the topic.
As part of that effort, the Executive Order asks different government organizations to produce their reports in the next 30-180 days and specifies a focus on consumer protection, financial stability, illicit finance, promoting US leadership, financial inclusion, and responsible innovation. Here is a summary of each key directive:
I. Protect U.S. Consumers, Investors, and Businesses by directing the Department of the Treasury and other agency partners to assess and develop policy recommendations to address the implications of the growing digital asset sector and changes in financial markets for consumers, investors, businesses, and equitable economic growth. The Order also encourages regulators to ensure sufficient oversight and safeguard against any systemic financial risks posed by digital assets.
II. Protect U.S. and Global Financial Stability and Mitigate Systemic Risk by encouraging the Financial Stability Oversight Council to identify and mitigate economy-wide (i.e., systemic) financial risks posed by digital assets and to develop appropriate policy recommendations to address any regulatory gaps.
III. Mitigate the Illicit Finance and National Security Risks Posed by the Illicit Use of Digital Assets by directing an unprecedented focus of coordinated action across all relevant U.S. Government agencies to mitigate these risks. It also directs agencies to work with our allies and partners to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks.
IV. Promote U.S. Leadership in Technology and Economic Competitiveness to Reinforce U.S. Leadership in the Global Financial System by directing the Department of Commerce to work across the U.S. Government in establishing a framework to drive U.S. competitiveness and leadership in, and leveraging of digital asset technologies. This framework will serve as a foundation for agencies and integrate this as a priority into their policy, research and development, and operational approaches to digital assets.
V. Promote Equitable Access to Safe and Affordable Financial Services by affirming the critical need for safe, affordable, and accessible financial services as a U.S. national interest that must inform our approach to digital asset innovation, including disparate impact risk. Such safe access is especially important for communities that have long had insufficient access to financial services. The Secretary of the Treasury, working with all relevant agencies, will produce a report on the future of money and payment systems, to include implications for economic growth, financial growth and inclusion, national security, and the extent to which technological innovation may influence that future.
VI. Support Technological Advances and Ensure Responsible Development and Use of Digital Assets by directing the U.S. Government to take concrete steps to study and support technological advances in the responsible development, design, and implementation of digital asset systems while prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.
VII. Explore a U.S. Central Bank Digital Currency (CBDC) by placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest. The Order directs the U.S. Government to assess the technological infrastructure and capacity needs for a potential U.S. CBDC in a manner that protects Americans’ interests. The Order also encourages the Federal Reserve to continue its research, development, and assessment efforts for a U.S. CBDC, including development of a plan for broader U.S. Government action in support of their work. This effort prioritizes U.S. participation in multi-country experimentation, and ensures U.S. leadership internationally to promote CBDC development that is consistent with U.S. priorities and democratic values.
This Executive Order appears to disprove the critics’ belief that the government would ban bitcoin and cryptocurrencies, while still seeking rational rules for how the industry should continue to develop over time. It is important to call out that the explicit mention of a US-based central bank digital currency is important too.
The United States government is saying they want to be the global leader in bitcoin and cryptocurrencies. There are plenty of details to figure out, but this is a SIGNIFICANT INFLECTION point in the validation of the industry. A technological breakthrough (blockchain technology) has grown in less than 15 years from inception to approximately $3 trillion in market cap, created millions of jobs, and is now being recognized by the largest nation states in the world for its strategic importance.
Pretty incredible to see how far this industry has come. We still have a lot of work to do though. There are billions of people counting on it.
Have an epic day,
Seth Maniscalco
Author, Prohibited Profits
Founder, Crypto Wealth Coach, LLC
Owner, Modern Wealth Management LP