As per two people familiar with the paper, President Joe Biden may ratify an executive order as early as midweek to marshal resources throughout the government to enhance a broad strategy to manage cryptocurrencies, including whether the US should issue an entirely virtual form of the dollar.
Over the next nine months, federal agencies will be required to complete an array of studies as part of the long anticipated order. Biden will order government agencies to work together to assess the prospects of a “central bank digital currency,” which would be distributed by the Federal Reserve. The introduction of a digital dollar would have far-reaching implications for international payment mechanisms, domestic business, and the financial sector.
The United States has faltered behind some other countries in developing a regulatory approach to digital asset markets, which have ballooned to more than $1.7 trillion in recent years due to lightning-fast growth. While the president’s directive will not influence policy, it is a significant step toward bringing legitimacy to an industry that has already upset established banking and financial systems. Yet, many in the sector may object, claiming that the primary objective of cryptocurrencies is to circumvent government oversight.
According to a source within the Biden administration, there is strong momentum behind such a move. The source further added,
“We could see a significant shift in policy in 180 days. This is a likely step toward creation of a central bank digital currency.”
Biden’s order likely to commence on Wednesday
The Biden directive, which is expected on Wednesday, comes despite growing concern about Russian elites’ use of cryptocurrencies to evade Western sanctions that have shut Russia off from major swaths of the global economy, as well as initiatives by China and other economies to build their cryptocurrency. However, Bloomberg was the first to disclose the order’s timing.
Biden’s directive instructs the Justice Department to investigate whether a new law is required to establish a new currency, as well as the Federal Trade Commission, Consumer Financial Protection Commission, and other agencies to investigate the imprint on consumers.
Other studies on the effect of a cryptocurrency on productivity, market and technical infrastructure requirements, and the ecological impact of bitcoin mining will be ordered, according to the source.