On Wednesday the 9th of February 2022, President Biden signed an Executive order into law to ensure the responsible development of digital assets in the US.
But what does this really mean?
Usually, whenever we hear new regulations on the crypto market it usually comes with fear, uncertainty and doubt (FUD) which sometimes affect the market and bring down prices in the cryptocurrency market.
So, does this mean that the "Executive Order" (EO) signed by President Biden is any different?
How does it affect the prices of cryptocurrencies on the market?
Would it also bring about an end to Stable coins?
Having done a bit of research on what the EO really entails, it seems to be the President giving out responsibilities to different agencies to delve a little more into cryptocurrencies to know how they really function in order to fairly regulate them.
It is also most likely a reaction to Russia's invasion of Ukraine. The US government is concerned that sanctioned governments may use cryptocurrencies as a financial alternative to avoid the implications of the sanctions.
This analogy isn't quite accurate at the moment because the digital asset market isn't yet at the point where it can comfortably replace a country's existing financial system, and cryptocurrencies leave a lot of traces on the blockchain, making it nearly impossible to conceal transactions.
EO places point men to perform reconnaissance
Typically, the EO appoints point men in charge of the development of the digital asset industry to assist in monitoring and regulating the new and evolving industry.
The Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), and Office of the Comptroller of the Currency (OCC) have been tasked with playing quarterback to the digital asset industry while assessing what truly occurs in the digital asset space.
The EO basically tells these agencies to do proper research on how this industry functions in order for it to be adequately and fairly regulated.
Stable Currencies
The EO seeks to examine the available stable coins and assess their efficacy, which will allow the government to determine whether or not to create its own digital stable currency in the future.
Environmental Impact
The executive order also considers cryptocurrency's environmental impact. This appears to be in the news all the time, as cryptocurrency miners use various types of equipment to mine cryptocurrencies. What is rarely discussed is how insignificant the CO2 emissions of cryptocurrencies are in relation to other industries such as banking, air conditioning, and even something as simple as dryers.
A Coinshare report states for the year 2021, the cryptocurrencies emission rate of CO2 was about 41 Mega tonnes. This is a huge number but when compared to industries like Airconditioning and electric repairs or even tumble dryers it seems like nothing especially when you think that cryptocurrencies also affords individuals financial freedom in the process.
However, it is the duty of the Environmental Protection Agency (EPA) to perform proper research on the impact on cryptocurrencies and give their report.
Reception of the Executive Order
The order is the first of its kind and is meant to give a foundation for how the constantly growing technology could be better understood. according to Forbes, the digital asset has grown rapidly into a $3 trillion market as of November 2021, and it is only proper that some rules of engagement are set.
It is widely regarded as a positive move because no strangulating steps have yet been taken, but the idea of regulations tends to signal a willingness to accept the industry, which will boost the confidence of future investors in areas such as cryptocurrencies, NFTs, blockchain games, and many others.
The EO also coordinates the digital domain by establishing a clear structure and operating framework, which aids in the development of the industry.
Overall, it demonstrates that the US government has the business's best interests at heart, and it also demonstrates that the government is willing to give the crypto industry a fair review rather than the somewhat criminal and irresponsible name it has previously received.
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