This Wednesday, US President Joe Biden signed an order on the government oversight of using crypto that requests the Federal Bank to enter the cryptocurrency fray and create their own currency if required.
The Biden administration is considering Cryptocurrency growth as a huge opportunity to check the risks and benefits of the same. This information came from a senior official who checked this order on Tuesday.
Under this order, Biden has also asked the federal agencies and Treasury department to check what impact the crypto will have on national security and financial stability. Jake Sullivan and Brian Deese, Biden’s top security advisors, said that this order would establish the first federal digital assets for the US.
In a joint statement, Deese and Sullivan said, “That will help position the US to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad in a way that protects consumers, is consistent with our democratic values and advances US global competitiveness.”
This step has come after the lawmakers and admin officials started raising concerns that Russia could be using cryptocurrency to avoid the impact of any sanctions on their banks, oligarchs, and oil industry after they invaded Ukraine.
Just last week, Democratic Sens. Elizabeth Warren, Mark Warner, and Jack Reed asked the treasury department to give details on how it plans to stop the use of cryptocurrency use for evading the sanctions.
The Biden administration reiterates that Russia cannot make up for the loss of US and European business by moving to cryptocurrency. As per officials, this order was very much in planning even before Russia’s invasion of Ukraine.
Daleep Singh, who is the Deputy national security and economic advisor to Biden, told CNN that the use of crypto use is not a workaround for the sanctions.
This order was widely anticipated by the crypto traders, finance industry, speculators, and lawmakers who compare the crypto market to the Wild West. Despite the risks, it involves the Government surveys have revealed that nearly 16% of the adult Americans have invested in Bitcoins. Apart from that, 43% of men aged 18-29 have put money into crypto.
Coinbase global, a leading crypto exchange in the US, said that they had not seen any increase in evasion activity recently. Last week Treasury secretary Janet Ellen said, “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions.” This industry is not one where things could be evaded.
With regards to the Federal Reserve getting involved with the crypto industry, they issued a paper in January 2022. It said that a digital currency would help the country as banks or payments firms can create their own digital wallets.
Some participants are happy with the Governments involvement with crypto. Adam Zarazinski, CEO of Inca Digital, which works for the Federal agencies, said that this order would provide better options for finance to grow. He also said that the US has a growing interest in the Financial innovation market, where China and Russia are gaining too.
As per the White House, more than 100 countries have begun creating their own digital currency. Katherine Dowling, general counsel for Bitwise Asset Management, said that this order would offer more clarity, and Government’s support could help in boosting of the crypto industry. However, Hilary Allen, a professor at American University, said that there should not be a rush in adopting cryptocurrency.
She said, “I think a crypto is a place where we should be putting the brakes on this innovation until we better understand it.” As crypto enters in the financial system, it increases the vulnerabilities to those who are investing in crypto and also for those who are a part of the economy.
On Tuesday, the Treasury Department said that their financial literacy arm would create materials that would help the people to make correct decisions with regards to digital asset choices.
Nellie Liang, the undersecretary for domestic finance, says that “History has shown that, without adequate safeguards, forms of private money have the potential to pose risks for the consumers and financial system.”
