Bitcoin recently recorded an 8% surge in a day. This development came after U.S. President Joe Biden announced his long-awaited executive order on cryptocurrencies. Many other crypto coins recorded similar growth. Bitcoin traded above $42,000 per coin at the time. The executive order is focused on addressing the lack of any framework around crypto development in the country. This lack of framework has long been seen as a sign that the U.S. may be falling short on the industry compared to the rest of the world. Therefore, they must be capable of getting all the knowledge about exporting the cryptocurrency market to its best, and you may find Terra Markets.
The Need for a Cryptocurrency Framework
Bitcoin’s initial spike in price came even before the executive order was announced. This was after the Treasury published information online about the upcoming executive order.
According to the Biden administration’s official statement, the new executive order is a step towards helping the US maintain technological leadership. The order will support innovation and mitigate the risks for the financial system, consumers, businesses, and even the climate.
There are even more aspects to the executive order. It has directed the government to take the following steps:
- Explore the tech infrastructure and capacity requirements for a digital currency backed by the Federal Reserve
- This digital currency should be unlike cryptocurrency, as it needs to be issued by the central bank
- An emphasis on a comprehensive and coordinated approach to digital asset policy
This order has been widely welcomed by investors and the crypto industry.
What Does the Order Mean?
The current US administration sees the massive popularity and growth of crypto as an opportunity. The new executive order comes as a way to explore the risks and benefits of these digital assets. The deeper details in the order require the Treasury and other federal agencies to examine the impact of crypto on national security.
According to industry experts, this is the first and most comprehensive federal digital assets strategy in the country. Some of the key benefits from this development are expected to be as follows:
- The U.S. will be able to play a leading role in the field of innovating and governing the digital assets environment
- Enhancing consumer protection
- Maintaining consistencies with its democratic values
- Advancing global competitiveness
Relevant Factors Influencing the Decision
The administration’s decision comes at a time when lawmakers and other officials have had been raising concerns about Russia using crypto to overcome the impact of U.S. and EU sanctions. In the wake of the Ukraine invasion, Russia has seen significant sanctions being imposed on its banks, oil industry, and its oligarchs, especially the ones with close ties to the Russian President.
According to the Biden administration, Russia will not be able to make up for the losses it has incurred from the sanctions by using digital assets. Besides, many officials in the administration have confirmed that crypto cannot be used as a workaround to overcome the impact of sanctions.
Many stakeholders, within and without the crypto industry, have had been waiting for this executive order for some time. This included:
- The finance industry
- Cryptocurrency traders
American Crypto Stats
The risks aside, the government has reported that only around 16% of American adults have made crypto investments so far. This is equivalent to 40 million Americans. The demographic with the biggest investment is men aged 18 to 29, with 43% of them. According to a major altcoin and Bitcoin Trading Platform, it has not witnessed any recent surge in activities indicative of evading the sanctions.
Fed’s Digital Currency Plan
The Federal Reserve had released a paper in January indicating the launch of a digital currency. This new digital currency was planned to be released via a model that will allow banks and payment companies to create digital wallets or accounts. Many digital currency participants have welcomed this idea, as it would mean that the government will become more involved with crypto.
Russia and China are already working on developing their own cryptocurrencies. Over 100 nations already have a similar pilot program in action. This executive order is seen as a step towards proving legal clarity on what the government thinks about digital assets. It is expected to make a long-term, positive impact on crypto. At the same time, some analysts have raised concerns about moving so fast in embracing cryptos.