United States President Joe Biden's administration is looking to release an executive action that will order federal agencies with controlling and regulating digital assets such as Bitcoin and other cryptocurrencies, arguing that the matter is of national security.
The details were revealed by a person familiar with the White House's plan which is expected to come in the next few weeks. The national security memorandum would task parts of the federal government with analyzing digital assets and creating a regulatory framework that encompasses cryptocurrencies, stablecoins, and non-fungible tokens (NFT).
National Security Memorandum
The person familiar with Biden's plan said that the memorandum was designed to look holistically at digital assets and develop a set of policies that would give coherence to what the American federal government is trying to do in this area.
The national security memorandum would enforce the assistance of the State Department, Treasury Department, National Economic Council, and Council of Economic Advisers. Furthermore, the White House National Security Council will also be a part of the policy-making because crypto already has economic implications for national security, Barrons reported.
The situation comes as many officials believe the cryptocurrency market is in the throes of a deep route linked to uncertainty over the Federal Reserve's fight against rising inflation. The federal agencies involved in the memorandum will be required to assess the risks and opportunities that crypto poses and analyze the details of a central bank digital currency.
Additionally, Biden's plan will review the effects of digital assets on financial stability in the United States. Authorities will also be looking to normalize regulations for crypto with other countries.
The plan was announced as federal agencies across the American government are discussing new rules to control and manage crypto in the country. The Biden administration released recommendations last fall proposing that only banks should be allowed to issue stablecoins, Yahoo Finance reported.
Regulation of Cryptocurrency
Throughout his administration, Biden has been relatively quiet about the issue of cryptocurrencies but there are signs that suggest the Democrat is skeptical if not outright hostile towards digital assets. Previously, Secretary of the Treasury Janet Yellen suggested cracking down on crypto because of the use of digital assets in money laundering and other illegal transactions.
During her confirmation hearing, Yellen said that cryptocurrencies are a particular concern in the United States. She argued that many digital assets were used, at least in a transaction sense, mainly for illicit financing. She added that the federal government needed to discuss ways to control crypto and make sure that money laundering was not being done across those channels.
Many experts believe that the American government will inevitably try to regulate cryptocurrency and would mark a major turning point for digital assets if or when authorities choose to do so. However, many people in the crypto industry are worried about the potential effects of the national security memorandum on digital assets. They wonder what would happen to cryptocurrencies, which are marked as technology that is safe, free, and decentralized if they were to be regulated by the government, The Byte reported.
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