Bitcoin Above $40k after Biden Signs Executive Order on Crypto

US President Joe Biden signed the much-anticipated executive order on cryptocurrencies on Wednesday, tasking federal agencies to coordinate their approach to crypto oversight in the US. The order, which is described as “benign” by analysts, created a positive sentiment around the market, pushing Bitcoin and other tokens to higher levels. 

The US Embarks a “Whole-Of-Government Approach” to Crypto

In an expected move, President Biden signed a first-of-its-kind executive order today, mandating numerous federal agencies to harmonize their efforts at drafting cryptocurrency regulations. The order directs agencies to improve communications in their work in crypto but does not put out very specific conditions. 

An accompanying fact sheet on the order claims it is “the first-ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets.” The White House detailed that the order defines six “key priorities” for the administration:

“The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”

To protect US customers and investors, the order directs the Department of the Treasury to develop a set of recommendations addressing the ramifications of the burgeoning crypto market. It also asks the agency and other partners to ensure sufficient oversight against any possible systemic financial risks posed by digital assets. 

Furthermore, the order seeks to promote responsible innovation, asking agencies to support technological advances while “prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.” It also directs agencies to explore the possibility of a US CBDC and whether it would be in the national interest.

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Cryptos Rally as Industry Percevies Order as a Positive Step

Spurred by optimism around the upcoming order, Bitcoin and other cryptocurrencies picked up momentum and surged higher. At one point, Bitcoin broke above $42,300, gaining around 10% over the past 24 hours. Nevertheless, the flagship cryptocurrency is currently trading at around $42,700, up by approximately 8%. 

Other cryptocurrencies have also secured significant gains. Notably, Ethereum, the second-largest cryptocurrency, spiked to above $2,760, gaining more than 6%, while Terra (Luna) gained around 20%. 

The rally in digital assets comes as analysts show optimism about the order. Marcus Sotiriou, an analyst at digital asset broker GlobalBlock, said investors were waiting for this order and decided to jump in as soon as it was clear that the order does not take a harsh stance. 

“The order seems relatively benign, hence giving the market some clarity. As many investors had prepared for the downside risks of this event by waiting on the sidelines, we are seeing many buy Bitcoin back in what appears to be a spot-driven rally.”

Jeremy Allaire, co-founder and CEO of Circle, described the order as an important step for cryptocurrency and the economic system in the USA.

Earlier today, in a statement that was later deleted, Treasury Secretary Janet Yellen called the order “historic” and claimed that it promotes “responsible innovation.” Yellen also detailed that the Treasury will partner with other agencies to produce a report on the future of money and payment systems. She said:

“This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses. It will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy.” 

The fact sheet did not mention when federal agencies need to deliver their reports. However, Reuters reported Tuesday that the order would set a 180-day deadline.

Do you think “good” regulations would make the US a crypto hotbed? Let us know in the comments below.