The cryptocurrency industry woke up to some good news on Wednesday morning after President Joe Biden signed an executive order to have regulators look into digital assets broadly. Rather than trying to ban them, the order indicates the White House is interested in sensible regulations that will spur innovation.
Bitcoin (CRYPTO: BTC) jumped as much as 10.4% over the last 24 hours as of noon ET on the news, Ethereum (CRYPTO: ETH) was up 8.1% at its high, and Dogecoin (CRYPTO: DOGE) also spiked 6.4%. Exchange Coinbase Global (NASDAQ: COIN) was also up big on the news, jumping as much as 11.7% and currently trading 9.4% higher on the day.
The major takeaway from today’s executive order is that the White House wants government agencies to examine risks and benefits of digital technologies, like blockchains and cryptocurrencies. This review includes the Treasury Department, Financial Stability Oversight Council, Commerce Department, and Federal Reserve, among others.
Agencies are expected to give policy presentations to the White House within the next 180 days, at which point they expect to recommend regulations relatively quickly. The process could still take months or years, depending on Congressional action, but in general it seems like the market is happy with the current executive order.
While regulations may not be welcome in most industries, the cryptocurrency industry has been operating in a grey area for a decade now. It’s looking for policies that will define the rules of the game (so to speak) and make sure tokens, non-fungible tokens (NFTs), and other digital assets are created legally. In that respect, I think this is a positive move overall.
I’ll point out that a lot of the executive order talked about central bank digital currencies, or CBDCs. It seems that the White House at least wants to explore the U.S. central bank creating its own digital currency that would then compete or live alongside other cryptocurrencies. It’s not clear what that means yet, but it’s notable for the industry.
All in all, I do see this as a positive sign for the crypto industry. Sensible regulation will allow the industry to flourish and this executive order seemed to take a tone of acceptance of the industry and willingness to find ways to allow innovation to thrive. That said, we’re still months or years from finding out what the rules will look like.
After months of waiting for an executive order about cryptocurrencies it’s finally here. That’s what the market is excited about today, despite the fact that it doesn’t mean there are definitive rules in sight. But sometimes talk of regulation or laws is enough to please investors, and that’s what we’re seeing today.
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