The United States moves to regulate cryptocurrency
The United States moves to regulate cryptocurrency, amidst the rising popularity of cryptocurrency, governments worldwide are chalking out strategies to manage this new industry.
The US administration is also set to regulate the fast-evolving sector.
Reports said the Joe Biden administration would issue an executive order to direct all government agencies to study cryptocurrency and central bank digital currency (CBDC) and suggest regulating crypto assets.
It will also ask the agencies to formulate measures to protect consumers, businesses, and investors, besides assessing the environmental impact and financial risks of the crypto industry.
The order will direct the agencies, including the Departments 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, particularly after the matter was highlighted by the International Monetary Fund (IMF).
The Attorney General, the Federal Trade Commission (FTC), and Consumer Financial Protection Bureau will analyse 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 to the president on protection measures after consulting with various stakeholders.
The executive order is also expected to delve into benefits and shortcomings related to stable coins, privacy and distribution ledger technology.
The move by the Joe Biden administration is coming at a time when there's increasing anxiety among regulatory authorities over cryptocurrency's potential to remove intermediaries – such as banks and other financial institutions – for business transactions.
Based on the reports from agencies, the US government will likely coordinate with other countries to standardise crypto rules across the globe. Currently, several countries are formulating their own rules to regulate the sector.