Crypto Community Divided Over Biden’s Digital Asset Executive Order

Key Insights:

• The Biden Administration has finally recognized the cryptocurrency industry.
• However, the order did not mention decentralization or Bitcoin.
• Not everyone is convinced of the need for a central bank digital currency (CBDC).

The United States has been dragging its feet regarding recognizing digital assets and developing a regulatory framework, but the wheels are finally in motion.

This week, the Biden Administration signed a long-awaited executive order that green lights further study of the crypto ecosystem and development of a central bank digital currency.

It has not been the crackdown expected from a government that has recently grown increasingly critical of cryptocurrencies.

Treasury Secretary Janet Yellen commended the initiative this week, adding that the department will work with other state departments to encourage innovation and minimize risks, something regulators have consistently warned about.

Positive Reactions

CEO of USDC stablecoin issuer Circle, Jeremy Allaire, said that the whole-of-government approach to at once harness opportunities while controlling and mitigating inherent risks in responsible innovation is encouraging.

Circle is one of the leading companies in the crypto space, working closely with regulators to get things moving along.

Executive director of the Blockchain Association industry group, Kristin Smith, echoed the sentiment stating,

“I’m really excited that there will be an opportunity to be part of discussions to keep the US a leader in this space.”

Stellar Development Foundation (SDF) CEO Denelle Dixon said that the executive order recognizes the need for clarity so the industry can continue to evolve, grow, and meet the ever-increasing enthusiasm and momentum we see for the sector.

Pro-crypto Republican Senator Tom Emmer observed that the order did not seek direct input from the Securities and Exchange Commission, which is a good thing:

“SEC Chair Gensler has spent the past year intimidating crypto innovators and entrepreneurs with his unproductive regulation by public statement and enforcement action. His input is not critical.”

Executive Director of the Washington-based crypto think tank Coin Center, Jerry Brito, also saw the positives. He stated that the message he takes from this EO is that the federal government sees cryptocurrency as a legitimate, serious, and important part of the economy and society.

Not All Enthusiasm

Not everybody was as enthusiastic, however. The founder of the ShapeShift crypto platform, Erik Voorhees, said that it was nothing more than a “perfectly political communication.”

“The crypto Executive Order basically says “we’re going to look into this stuff” (as if they haven’t been for years) and then lists a number of platitudes about balancing innovation with protecting the financial system.”

Senator Emmer pointed out that it did not mention decentralization anywhere. In contrast, Human Rights Foundation CSO Alex Gladstein pointed out that it didn’t mention Bitcoin (BTC) but was “heavy on CBDCs.”

Pro-crypto Senator Cynthia Lummis was also unconvinced on the need for a CBDC. Concerns have been raised that a central bank digital currency would give the Fed the same level of authoritarian control over finances that the Chinese government has.