Seeking Answers, Biden Executive Order Could Spur Innovation in Digital Assets

Yesterday President Biden signed a first-of-its-kind Executive Order on cryptocurrencies, directing federal agencies to coordinate their efforts at seeking answers on issues pertaining to digital assets. Specifically, the EO calls for a study of the benefits and risks of digital assets, a review of consumer protection laws, environmental impacts of digital mining, and additional research on the possible development of a U.S. central bank digital currency. Importantly, today's announcement does not contain any new rulemakings that could inhibit the growth of this growing industry, but does leave the door ajar for new rules in the future

Despite being a relatively new innovation, cryptocurrencies have become mainstream among investors - particularly younger Americans - and the general public. About sixteen percent of adult Americans, or roughly 40 million people, have invested in, traded or used cryptocurrencies, according to research conducted by Pew. They also note roughly one-third of individuals under the age of 31 have traded crypto. The massive growth in this specific sector, both here in the United States and abroad, has exponentially increased the market value of the cryptocurrency industry, surpassing a $3 trillion market cap last November at its height, and up from $14 billion just five years prior. 

If one thing is clear, it's that the adoption of crypto both as an investment or a payments solution isn’t going away but will continue to disrupt the global financial system. Over the next decade, this disruption will lead to more innovation, more financial inclusion, and greater connection around the world.

In response to the news, Thomas Aiello, NTU’s Director of Federal Affairs, released the following statement:

"Blockchain and other similar ledger technologies are still relatively new, and we’ve only just begun to understand their potential across our economy. Ultimately, it is vital that federal policy, either out of Congress or the executive branch, help foster - not stifle - its growth. So while we welcome a review of the existing federal regulatory framework, it is critical that the Biden administration listen to all stakeholders to ensure they craft regulations that are not heavy-handed. As we’ve seen too often with this administration and Congress, they are quick to regulate facets of the economy without regard to the consequences, both intended and unintended.

Without a doubt, the widespread use of crypto has the potential to play a large role in breaking down the walls to a more decentralized internet and digital economy. But the Biden administration must be careful as there is no faster way to starve a new, innovative and potentially revolutionary technology than to regulate it out of existence. We hope the administration takes the path of promoting innovation through a light-touch approach that benefits businesses, consumers, and investors.”