Biden and Crypto
The president signs new crypto order ,find out what it means for Solana
Harold L. Mar.11,2022
- Biden signed an executive order on cryptocurrencies which was a first-of-its-kind for the United States.
- The executive order was not very specific on what agencies were supposed to adopt in terms of new positions or methods.
- The Department of Treasury has been tasked with the creation of a future money report.
President Biden signed a brand new order on dealing with crypto. The new order is designed to coordinate efforts and deal with the drafting of cryptocurrency. The efforts made to regulate cryptocurrency are to ensure customers are protected and that there is financial stability in the use of these new digital tokens. The focus was on leadership in the financial sector and for there to be responsible innovation. This comes into play as there have been many “rug pulls” in the creation of new tokens and NFT.
The executive order does not give specific or exclusive directions on how to deal with the digital asset sector, instead, it lays out specific positions that agencies are to adopt in dealing with digital currency.
There was worry that there would be new regulations imposed on cryptocurrency as the United States has seen aggressive new regulations on taxation and reporting of crypto and NFT. The new order signed by President Biden did not impose any new regulations for companies or customers to abide by.
The tone on cryptocurrency is still a bit of the same, there are those that believe that crypto can still be used to defraud or perform criminal actions, such as money laundering or evade sanctions, without what is being called “sufficient oversight”. There are those that also believe that cryptocurrency is the way to innovation and evolution of the financial system, new jobs, and opportunities being developed every day with the new technology developed on various blockchains providing that path.
With over 16% of Americans (roughly 40 Million) investing in or trading in crypto new protections need to be put in place and the president has signed an order with 6 key facets. They are
- Protecting U.S Interests
- Protecting government finance stability
- Preventing illicit use of cryptocurrency
- Responsible innovation
- Financial inclusion
- U.S Leadership
As the order was being developed one of the key factors discussed was the volatility of crypto as a whole with the price of Bitcoin jumping from 10K to 70K then back down again being used as an example of how this can harm investors. The price of bitcoin saw a jump once a leak of the plan was seemingly published. Investor protection is one of the main goals of this new order as the president hopes to understand both the microeconomic and macroeconomic aspects of crypto.
The future of money and payment systems is another task for the Treasury Department to report on as the antiquated fiat system is one of the reasons for the creation of crypto in the first place, transactions internationally being one of the major driving forces behind that creation. The question that needs to be answered by the Treasury Department is how the current financial system hinders or aids in today's economy.
The next question that needs to be addressed is the likelihood of a Central Bank Digital Currency being created- a “Digital Dollar” as it may be classified. There are other countries that are working on this as well with China creating a digital yuan for use in its country. There are roughly 100 countries looking into the idea of digital currency to use for domestic and international transactions. The order will task the financial agencies of the United States to determine whether implementation of a CBDC is feasible or not at this point in time.
Play it Safe
As with any order the president signs, the security of the nation and how the US can securely cooperate with other nations is of course of the utmost importance. The order has tasked agencies with the research of how cryptocurrency can be used in a way that does not damage the sovereignty of our nation and how we can use cryptocurrency to work with other nations in trade and other financial dealings.
With the war going on in Ukraine and the sanctions being placed on Russia the goal was to also find ways to make sure cryptocurrency could not be used to circumvent any sanctions that are placed on countries for their atrocious actions. Crypto has been used for methods such as money laundering and the fact that crypto does not have any official identity tools for screening makes it a tool that can also be used for dishonest purposes. That being said, several official studies have demonstrated that cryptocurrencies are one of the least used means of money laundering, the primary vectors of money laundering being USD in bank accounts and real estate transactions
What does it mean for Solana?
All in all these regulations did not impose any new rules against crypto. Instead, this new order has given hope to the adoption of crypto as a mainstay method of financial use and growth. For projects such as Solana, this is a step in a great direction as projects such as Solana Pay have just got off to a good start. With Solana Pay, the speed of the Solana blockchain, its low transaction costs, and the intuitive tools being deployed on it mean the future of Solana could be very bright indeed.