The United States is taking steps to regulate cryptocurrency, amid the rising popularity of cryptocurrency, governments around the world are working out strategies to manage this new industry.
The US government will also regulate the rapidly evolving sector.
Reports said the Joe Biden administration would issue an executive order ordering all government agencies to study cryptocurrency and central bank digital currencies (CBDC) and propose to regulate crypto assets.
It will also ask the agencies to formulate measures to protect consumers, businesses and investors, in addition to assessing the environmental impact and financial risks of the crypto industry.
The order will instruct agencies, including the ministries of the Treasury, State, Justice and Homeland Security, to produce reports on the future of money and payment systems.
First reported by Yahoo Finance, the executive order will ask:
The Financial Stability Oversight Council (FSOC) to study what impact cryptocurrency will have on financial stability, especially after the issue was highlighted by the International Monetary Fund (IMF).
The Attorney General, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau will analyze the impact on market competition.
The Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency will consider market protection measures.
The Treasury Department will submit a report on the protective measures to the President after consultation with various stakeholders.
The executive order is also expected to address benefits and shortcomings related to stable coins, privacy and ledger technology.
The Joe Biden administration’s move comes at a time when regulatory authorities are increasingly concerned about cryptocurrency’s potential to remove middlemen — such as banks and other financial institutions — for business transactions.
Based on the reports from agencies, the US government is likely to work with other countries to standardize crypto rules around the world. Currently, different countries formulate their own rules to regulate the sector.