According to the White House, US President Joe Biden signed an executive order directing the government to evaluate the risks and benefits of developing a central bank digital currency, digital dollar, as well as other cryptocurrency concerns.
The administration’s holistic and methodical approach soothed market fears of an imminent governmental crackdown on cryptocurrencies, and Bitcoin soared as a result of the news.
Bitcoin climbed 9.1% to $42,280 in noon trading, putting it on course for its biggest percentage rise since February 28.
The Treasury Department, the Commerce Department, and other important departments will be required by Biden’s directive to submit reports on “the future of money” and the role that cryptocurrencies will play.
Comprehensive monitoring of the cryptocurrency market, which surpassed $3 trillion in November, is critical to ensuring US national security, financial stability, and competitiveness, as well as combating the growing threat of cybercrime, administration officials said.
According to Brian Deese, head of the National Economic Council, and Jake Sullivan, White House national security adviser, the executive order is part of an attempt to foster responsible innovation while minimizing the risk to consumers, investors, and businesses.
Given the dollar’s importance as the world’s principal reserve currency, administration officials said the US was taking great care in deciding whether – and how – to move forward with building a digital dollar.
Additionally, the order encourages the Federal Reserve to continue its research and development initiatives.
According to the Atlantic Council, nine countries have established central bank digital currencies, and 16 more – including China – have begun developing such digital assets, prompting some in Washington to fear that the dollar could lose part of its dominance to China.
In addition to the Securities and Exchange Commission and the Consumer Financial Protection Bureau, the order asks for more than a dozen reports on issues raised by cryptocurrencies, such as systemic risk and consumer protection, to be looked at.