White House launches comprehensive plan for cryptocurrency regulation

White House / Flickr

The White House said on Wednesday that President Biden is about to issue a new strategy for the federal government. The White House described the forthcoming executive order as the first ever whole-of-government approach to addressing the risks and benefits of digital assets and their underlying technology.

The White House said in a release that the rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier.

The Commerce Department will be directed to develop a framework to drive U.S. competitiveness and leadership in digital asset technologies. The order encourages the Federal Reserve's research into a US-backed digital dollar.

The news of the order was reported earlier this week.

Regulators have been calling for a coordinated regulatory response since at least last year because of the many disparate agencies. Consumer banking, investments, and sanctions enforcement are all handled by the federal government in different ways.

The order won't have an immediate effect on how cryptocurrencies are regulated or how businesses operate, but it will set in motion a slower regulatory process that will take years to bear fruit. The Treasury Department and Securities and Exchange Commission are directed to assess risks and opportunities involved in the use of cryptocurrencies, which will likely result in future regulations issued through the notice-and-comment process.

The new framework has been positive for the industry, seeing it as a way to avoid regulatory uncertainty.