According to persons familiar with the situation, the Biden administration is considering issuing an executive order on cryptocurrencies. As part of an effort to establish a government-wide approach to the hot asset class.
Federal agencies would be require to examine and make recommendations on issues such as financial, economic innovation, and national security.
According to the persons, the project will also try to unify agencies’ digital currencies across the executive branch. The proposal would encourage departments that have paid little attention to crypto to do so. One source said officials considered creating a White House crypto czar to oversee the issue.
The White House did not respond to a request for comment on the crypto program.
The draft directive is part of a White House effort to develop a broad policy for digital tokens, which have become a significant source of concern for regulators as they’ve grown in popularity among ordinary Americans.
According to two persons, no decision takes on whether or not to disclose the executive order. Government will make its whole cryptocurrency plan public even if President Joe Biden doesn’t act.
Biden’s preferred financial regulators are becoming more hawkish as they seek to oversee the booming crypto industry. Regulators concerned about a lack of investor protections and potential dangers to financial stability as the market reaches $2 trillion.
National security organizations across the government are also dealing with high-profile digital currency incidents in ransomware attacks, such as the Colonial Pipeline incident earlier this year.
A recent report revealed agency wrangling over who has authority on fast-growing market areas. A recent report revealed agency wrangling over who has authority on fast-growing market areas like stablecoins and crypto loans. Influential actors in the new industry are campaigning against more regulation, claiming it kills innovation and jobs.
Define Roles and Responsibilities
According to the persons, the draft, circulated senior officials and regulators, would clarify the roles of various agencies and charge them with investigating pertinent themes and reporting back on their findings.
From the Treasury Department and financial regulators to the Commerce Department, the National Science Foundation, and national security agencies, the framework would impact various institutions.
The goal of the White House is to take an united strategy to crypto, rather than the more ad hoc approach to financial stability, national security, and illicit finance issues during Biden’s first nine months in office, whether via executive order or other ways, an administration official said.
The administration also wants authorities to look at crypto in areas including consumer protection, competition, research, and innovation.
For years, Washington policymakers have failed to come up with a cohesive strategy for managing digital assets. The Securities and Exchange Commission, for example, claims that many tokens are investment contracts under its jurisdiction. Simultaneously, the Commodity Futures Trading Commission monitors crypto derivatives, and authorities ranging from the Internal Revenue Service. The Treasury Department’s Office of Foreign Assets Control claim jurisdiction.
It’s been reported that SEC Chair Gary Gensler, who taught digital asset courses at MIT, was severe. However, regulators in other parts of the government are claiming new territory as well.
For example, a panel of US authorities led by Treasury Secretary Janet Yellen expects to recommend that financial regulators take the lead in monitoring stablecoin issuers, a crucial component of the crypto market.
Expertise of the Team
The White House coordinates the administration’s operations through the National Economic and Security Councils.
One obstacle the White House has faced in developing its plans is a lack of a senior staffer with strong crypto expertise who can focus on the subject, according to one person involved with the policy process.
According to a White House official, Deputy National Security Advisor Daleep Singh, a veteran of the Treasury Department and the Federal Reserve Bank of New York, is intimately involved in the task. According to the insider, a Treasury officer also leads the department’s cryptocurrency policy work and focuses on these concerns.
Tim Wu, the president’s special assistant for technology and competition policy, is knowledgeable in the field. Still, he is barred from working on crypto due to his holdings, which included between $1 million and $5 million in Bitcoin and as much as $250,000 in Filecoin as of when he filed his financial disclosures earlier this year.
Even as the overall crypto strategy is still being develope, the Biden administration’s public-facing work on digital. The Justice Department established a National Bitcoin Enforcement Team on Wednesday to investigate and prosecute cryptocurrency fraud.