The order is expected to be issued by the Biden administration and will make it mandatory for government agencies to conduct risk analysis on Cryptocurrencies as a national security threat.
Biden’s administration is expected to issue an executive order in the coming weeks about actions the United States government will take regarding digital assets.
According to Barron’s, the executive order is expected to be issued in a national security memorandum. Biden’s memorandum would assign some government entities to study crypto, stablecoins and nonfungible tokens with the goal of developing a workable regulatory framework.
The source was quoted as saying:
“This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space.”
Earlier this week, Forbes reported that government entities would likely issue reports on their findings by mid-2022 after having looked at “the systemic risks of cryptocurrencies and their illicit uses.”
The administration’s rationale for the executive order is that crypto is a cross-border tool for shifting money. The ability of decentralized blockchain technology to circumvent geo-specific surveillance or rules means the administration may push for synchronized international regulations with other countries.
Balchunas noted that the Biden administration’s recent comments about the risk of cryptocurrency being used for terrorism, as well as a constant rejection of Bitcoin (BTC) spot ETFs, could be linked.
In addition, he also referred to the new developments as a “broader crypto crackdown” in a Friday tweet.
Expanding crackdown
Another bill being proposed by House Democrats is alarming to the crypto industry. The America COMPETES Act has one provision that would allow the Treasury Secretary to ban crypto exchanges from operating without any prior notice.
Brito said that he believes the bill is likely to pass “in some form.
House representatives are asking the president’s nominee to the Treasury Department to clarify aspects of the Infrastructure Bill that pertain to digital assets. The Infrastructure Bill was signed into law last November amid some controversy, as its definition of a “broker” is arguably too broad by including miners, software developers, transaction validators and node operators.
Some crypto experts have expressed concern about the recent congressional request to regulators to create a rule to limit the information brokers can obtain to prevent creating an “un-level playing field for transactions in digital assets and those required to provide them.” The proposed rule could limit the types of information brokers can obtain from senders and receivers of crypto.
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