By

Anthony Spadafora

published about 1 hour ago

Federal agencies have been tasked with examining the benefits and risks of cryptocurrencies

(Image credit: Shutterstock / Wit Olszewksi)

The US government plans to carefully examine the benefits and risks of cryptocurrencies like Bitcoin following a new executive order from President Biden.

While the executive order has now been signed by President Biden, the cryptocurrency market became aware of  it early as the US Treasury accidentally released a statement calling the move “historic” the day before it was released. The now deleted statement also included some of the details of the executive order ahead of time which led to an eight percent jump in the price of Bitcoin.

President Biden's latest executive order calls on federal agencies to take a unified approach to both the regulation and oversight of digital assets. The White House provided further details in a press release on the areas that will be prioritized going forward, saying:

“The Order lays out a national policy for digital assets across six key priorities: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.”

Whole-of-government approach to crypto

One of the main areas President Biden's executive order is focusing on is the protection of US consumers, investors and businesses when it comes to investing in crypto due to the high number of crypto scams over the years.

The US government plans to do this by directing the Department of the Treasury and other federal agencies to develop policy recommendations aimed at addressing the implications of the cryptocurrency market and changes in the financial market. However, the executive order also encourages regulators to “safeguard against any systemic financial risks posed by digital assets”.

While consumers have begun investing in and using cryptocurrency, so too have cybercriminals which is why President Biden wants to mitigate the illicit finance and national security risks posed by digital assets. To do this, federal agencies will need to work together though international collaboration will be needed as well.

Since mining bitcoin and other cryptocurrencies requires a great deal of energy, President Biden also wants the US government to take a closer look at how to make the process more environmentally friendly. Although the executive order doesn't call for the creation of a digital dollar, it does suggest researching and developing a US Central Bank Digital Currency (CBDC) if it would be in the best interest of the country.

Even though this wasn't the sweeping regulation around cryptocurrencies that many expected, new regulations could arrive as a result of President Biden's executive order once federal agencies have a chance to further investigate the six key priority areas laid out in it.

Via CNBC

After getting his start at ITProPortal while living in South Korea, Anthony now writes about cybersecurity, web hosting, cloud services, VPNs and software for TechRadar Pro. In addition to writing the news, he also edits and uploads reviews and features and tests numerous VPNs from his home in Houston, Texas. Recently, Anthony has taken a closer look at standing desks, office chairs and all sorts of other work from home essentials. When not working, you can find him tinkering with PCs and game consoles, managing cables and upgrading his smart home.