Biden Crypto Regulation: What to Expect From This Executive Action
It’s growing clear that some form of President Biden crypto regulation is coming. An executive action is imminent. And government agencies will gather to help regulate cryptocurrencies. The announcement may come in a matter of weeks.
Some form of regulation can be useful. In fact, some oversight is necessary. We’ve long been of the opinion that Tether (USDT) needs a closer examination. This stablecoin once had 100% of its reserves backed by actual cash. But as we know now, that’s not the case. (You can read more about that here.)
News of some type of White House crypto regulations isn’t shocking. We’ve heard the possibility before. It is surprising that this would come ahead of other agenda items.
On the campaign trail, some form of student loan forgiveness was a common topic. And estimates suggest that more than 66% of Americans are in favor of some type of loan forgiveness. The other elephant in the room is the legal status of marijuana. True, a simple executive order won’t fix this. However, President Biden can order agencies to consider altering the scheduling of marijuana. And he can also suggest a change in enforcement policies.
The latter subject would be a veritable slam dunk for the president. According to Pew Research, 91% of Americans are in favor of making medical marijuana legal. And 60% of those polled are in favor of legalizing recreational use.
But those have been back burnered. Instead, we’re looking at Biden crypto regulations coming soon. Something 1 in 5 Americans think is unnecessary. But this isn’t terrible news. Here’s what that may look like.
What Biden Crypto Regulations Could Mean For Investors
First and foremost, any sort of Biden crypto regulation is still many months away from practice. The executive action hasn’t even gone public. So we don’t expect this news to cause any additional turbulence in the crypto markets just yet.
But it is fair to assume that the executive action will take a multi-pronged approach. Members of various government agencies will analyze and put together some sort of framework. Framework that will help regulate crypto, stablecoins, and NFTs.
The State Department, Treasury Department, National Economic Council and the Council of Economic Advisors will determine the scope of the Biden crypto regulations. In addition to the agencies listed above, the White House National Security Council will also be involved.
That last one was likely added to help fast-track the progress of any Biden crypto regulations. Though to be fair, digital assets don’t just stay in the U.S. And this helps stress that crypto regulations are needed for the sake of national security. At least that’s what the executive action will state.
The executive action will be officially announced in a matter of weeks. From there it’s anticipated that the five agencies will have up to six months to determine an approach for overseeing how crypto is used in the U.S.
While that seems like a short timeline for such a complicated process, it does impart some hopefulness.
A Piece Meal Approach Should Be Expected
A mere six months is not enough time to outline a coherent approach for Biden crypto regulations. At least not on a large scale. We’ve seen before that a lot of folks in government can’t quite wrap their head around crypto. And getting five separate agencies to agree on any large plans seems very unlikely.
Thankfully, what’s addressed though this executive action should be simple. Again, we hope the Biden crypto regulations take a closer look at stablecoins. This has been put forward before. And it seems to be the lowest hanging fruit.
Also, it would be nice to have a consensus as to how crypto is treated. The Financial Crimes Enforcement Network doesn’t consider crypto to be legal tender. The IRS, however, views crypto as property. And the Securities and Exchange Commission considers crypto to be a security. A little bit of cohesion would be nice here.
All we’d like to see is these five agencies delivering more clarity. And addressing either of these two issues should is a net positive. What’s uncertain is whether they’ll go above and beyond these. The scariest prospect would be a bunch of bureaucrats that don’t understand cryptocurrencies to go meddling above their pay grade. But again, the brief timeline they’ll have does breed some hope this won’t be the case.
The Bottom Line on the Biden Crypto Regulations
As it stands, there’s nothing to worry about yet. Most in the crypto world might shudder at the thought of some form of Biden crypto regulation. But it’s unlikely the 79-year-old president will have any actual say in what comes of his executive action. And we still think there are plenty of other more pressing matters to explore. But hey, we’re not the ones that got elected.
On top of this, any developments are many months away. We could easily see bull markets come and go in that time. In other words, there are much more pressing matters to worry about. For instance you’d be better off checking out past returns (or looking at projected returns) using our crypto calculator.
But if anything more of substance does come from the Biden crypto regulations, we’ll be sure to keep you updated. In the meantime, might we suggest checking out this token that’s currently outpacing just about every major token out there.