Joe Biden’s administration wants to clarify once and for all the regulatory landscape surrounding the crypto sphere —taking the opportunity to exert greater control over the industry.
Apparently, within the next few weeks, it is expected that the White House will issue an executive order declaring the regulation of cryptocurrencies as a matter of national security – which would raise the priority level that different federal agencies would have to assign to their efforts to monitor the crypto ecosystem.
A Holistic Vision
According to a report by Barron’s, the national security memorandum would essentially seek to achieve coordination among all branches of the government so as to distinguish and limit the competencies of each of the entities involved.
Currently, there are conflicting opinions on several aspects inherent to the cryptocurrency industry and the use of cryptocurrencies in transactions. The IRS, CFTC, SEC, and OCC have issued numerous statements affecting the crypto industry. On several occasions, even law enforcement agencies have worked separately on very similar agendas – such as trying to crack privacy cryptocurrencies.
An anonymous source told Barron’s that Biden and his advisers want to achieve the unity of thought that previous administrations had failed to accomplish:
“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,”
The State Department, Treasury Department, National Economic Council, Council of Economic Advisers, The White House National Security Council would be among those called upon to issue guidelines to regulate cryptocurrencies, stablecoins, and NFTs.
There is also an interest in developing a set of guidelines to coordinate international relations on this matter. The anonymous source noted that the Biden administration believed it was necessary to work with other countries “on synchronization.”
Are Biden’s Regulatory Ambitions Too Excesive For The Crypto Industry?
Joe Biden’s efforts to control the cryptocurrency ecosystem have been viewed with suspicion by enthusiasts and entrepreneurs who deal with these technologies on a daily basis. Already last year, prominent entrepreneurs sounded the alarms about the possible risks of the Infrastructure Bill, pointing out that it could make it impossible for decentralized wallets, DeFi protocols, and other players in the cryptocurrency world to function correctly if they were considered as brokers —as the act proposed.
Also, the America COMPETES Act could be potentially dangerous for the cryptocurrency industry since, as Coincenter’s Jerry Brito points out, it would give the Treasury Secretary unchecked and unilateral power to ban exchanges and other financial institutions from engaging in cryptocurrency transactions.
8/ If adopted into law, this provision would be disaster not just for crypto but for privacy and democratic public process related to *all* types of financial transactions.
— Jerry Brito (@jerrybrito) January 26, 2022
9/ It empowers the Secretary to prohibit any (or indeed all) cryptocurrency transactions (or any other kind of transaction) without any process, rulemaking, or limitation on the duration of the prohibition.
— Jerry Brito (@jerrybrito) January 26, 2022
The White House has not officially talked about the national security memo, and refuse to comment on the matter. However, both the America COMPETES Act and the Infraestructure Bill are on track in terms of the bureaucratic procedure neccesary for their approval.