Ride the Lightning

Biden Orders Study of Cryptocurrency Risks and a Possible Digital Dollar

March 15, 2022

On March 11, CBS News reported that President Biden signed an Executive Order on March 10 directing the U.S. Department of Treasury and other federal agencies to study the impact of cryptocurrency on financial stability and national security. The order also asked the Federal Reserve to explore whether the central bank should create its own digital currency.

Although considered a highly unstable form of money by most financial experts, bitcoin reached its highest price point in 2021, partly because more companies began accepting it as a form of payment. Some athletes and politicians are now receiving parts of their salary in cryptocurrency, while Wall Street has created exchanged-traded funds around crypto futures.

To signs that crypto is gaining steam, Coinbase went public on the Nasdaq last April and Crypto.com aired a widely seen commercial featuring Hollywood star Matt Damon.

Despite the risks of crazy price swings, roughly 40 million people in the U.S. have invested in cryptocurrencies, surveys show. About 43% of men between ages 18 and 29 have put money into crypto, according to Pew Research data.

Some structure is liked to be imposed on the previously mixed regulatory response to cryptocurrency, which in the global market is valued at approximately $1.85 trillion.

 “Fundamentally, an American approach to digital assets is one that encourages innovation but mitigates the risks to consumers, investors, and businesses, broader financial stability, and the environment,” National Economic Council Director Brian Deese and national security adviser Jake Sullivan said in a statement. They went on to say that Biden will “reinforce U.S. leadership in the global financial system and safeguard the long-term efficacy of critical national security tools like sanctions and anti-money laundering frameworks.”

The order directs federal policymakers to place “urgency on research and development” of a central bank digital currency. More than 100 other countries including Russia and China are exploring doing them same for their own currencies. The Federal Reserve issued a report in January outlining potential benefits and drawbacks of issuing electronic cash, requesting public input on the matter.

“As we take on this important work, we’ll be guided by consumer and investor protection groups, market participants, and other leading experts,” Treasury Secretary Janet L. Yellen said in a statement. “Treasury will work to promote a fairer, more inclusive, and more efficient financial system, while building on our ongoing work to counter illicit finance and prevent risks to financial stability and national security.”

 Sharon D. Nelson, Esq., President, Sensei Enterprises, Inc.
3975 University Drive, Suite 225, Fairfax, VA 22030
Email:   Phone: 703-359-0700
Digital Forensics/Cybersecurity/Information Technology
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