White House Aims To Execute Order on Government-Wide Crypto Strategy

The Biden administration is drafting an executive order for a government-wide crypto strategy, according to sources familiar with the matter.

White House is planning to roll-out the directive as early as February, empowering the U.S. Federal agencies to assess the risks and opportunities posed by the cryptos, sources told Bloomberg.

“Multiple meetings on the plan” of drafting an executive order, were held by senior administration officials, sources confirmed. Federal agencies will be asked to submit reports of their findings, due in the Q3 and Q4 of 2022.

The draft will detail economic, regulatory and national security challenges posed by cryptocurrencies, the officials noted.

The news comes after the Fed released a preliminary paper on a digitized currency and set out a deadline till May 20 for public comments and inputs.

All Three Fed’s Branches Grappling With Crypto

All three arms of the Federal government are working on possible crypto developments.

For instance, the executive branch, where the president’s working group on stablecoins like Tether or USDCoin, the legislative branch involving the Congress’s recent bills focused on U.S. crypto policy, and the judiciary branch, where the U.S. Department of Justice set up a crypto task force to combat ransomware attacks, show that the government is grappling with crypto.

Additionally, the Securities and Exchange Commission (SEC) has been moving in leaps and bounds when it comes to digital assets regulation. Chair Gary Gensler noted recently that too many projects in the crypto space were not regulatory compliant. He also touched on the subject of regulations in the crypto industry.

The SEC has repeatedly urged crypto firms to register with the regulator in order to protect the public from possible frauds.

“Digital Dollar” Anytime Soon?

The Fed has still not sided for or against a digital dollar or a central bank digital currency (CBDC). While a new Thursday report laid out the potential benefits and risks of digitizing the US dollar, the Fed clearly said that it “does not intend” to issue a CBDC.

The report mentioned that without a “clear support” from the executive branch and Congress—“ideally in the form of a specific authorizing law,” there won’t be a possible roll-out of a digital dollar soon.

A Fed-backed digital dollar would come with an array of benefits touted by cryptocurrencies minus their extreme price swings and transaction fees.

Experts in the crypto field have reacted to the Fed’s report on CBDC moves. According to Salman Banaei, head of public policy in North America for crypto data firm Chainalysis, the Fed is attempting to be “politically savvy” as it weighs a digital dollar. “They would have gotten a lot of political pushback,” he told a publication recently.

Will crypto and central backed digital currency coexist?
I think the banksters at The Fed want more of a stranglehold. They will do their best to demonize crypto and possibly ban it like what's happened in other countries. https://t.co/c1NBF5lqt2

— Matthew Loop (@matthewloop) January 23, 2022

A general lack of privacy in CBDCs may slow down adoptions, and this was cited as a top concern in an ECB digital euro survey released last year. In any case, these CBDCs aren’t expected to be released on short notice.