The prices of the world’s major cryptocurrencies – including bitcoin and Ethereum – have crashed this week. Bitcoin, for example, has fallen below $33,000 per unit, while Ethereum is down to about $2,300. At the center of all this is a new executive order that Joe Biden is set to issue. The order will ask the Fed and other financial agencies in the U.S. to look at cryptocurrency and determine the risks and opportunities that come with the space.
The U.S. Is Looking to Implement New Crypto Rules
The new order could be signed as early as next month, and is slated to bring regulatory, economic, and national security challenges surrounding crypto into the limelight. Various agencies throughout the nation would be expected to develop reports and documents detailing their findings and discuss the systemic risks that come with investing in digital currency.
Analysts at GSR – a digital asset market maker – explained in a recent publication:
Biden is readying an executive order that will outline a comprehensive government strategy around cryptocurrencies and will ask federal agencies to determine their risks and opportunities. Other items causing investor concern include rising inflation and central bank policy accommodation removal, mounting speculation that Russia may invade Ukraine, Omicron worries, and supply chain disruptions.
The U.S. government has not always been kind to crypto, nor has it always seen the space in a positive light. Gary Gensler, for example, runs the U.S. Securities and Exchange Commission (SEC). In an interview a few months ago, Gensler described the crypto space as “rife with fraud,” and said that heavy regulation needs to enter the fray if crypto is ever going to be safe for use amongst the public.
He stated:
[Crypto] is rife with fraud, scams, and abuse in certain applications. We need additional congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks.
Many exchanges and crypto businesses throughout the nation are now calling for U.S. regulators to get their act together and discuss what it is that can be done to make the rules surrounding the space much clearer and easier to understand. Brian Armstrong – the CEO of Coinbase, one of the largest and most popular digital currency trading platforms in the U.S. – had this to say in an op-ed last year:
My concern is that entrepreneurs and businesses have little visibility into what regulators expect of us. The positions regulators take often aren’t applied in ways that seem consistent or equitable.
What Does Elliptic Say?
In addition, the constant volatility that these assets continue to face has caused regulators to feel more pressure to implement new rules. Elliptic – a London-based blockchain analysis firm – explained:
Consumer protection will be the major regulatory focus issue of 2022, and consumer protection authorities will become major forces shaping the crypto space.