Crypto folks are celebrating Biden’s executive order, which is concerning
Right after Biden announced his crypto plan, the price of Bitcoin and other currencies spiked.
President Biden just signed an executive order on cryptocurrencies. This is good for Bitcoin. No, like, actually. Cryptocurrency maximalists will often act like anything and everything is good for their digital money, but in this case, it appears that the cryptocurrency community is genuinely pretty excited about what Biden signed: Bitcoin jumped nearly 10% in value, and much of the crypto market got a boost to match.
That should give us some pause.
In practice, the executive order on “Ensuring Responsible Development of Digital Assets” is a mostly fluff — the Biden administration kicking the can on any sort of action when it comes to cryptocurrency regulation. It basically calls on the federal government’s handful of regulators to look into how cryptocurrency is currently being handled, and how the government can get involved eventually to provide some stability.
What is noteworthy, though, is the fact that there doesn’t appear to be any sort of crackdown coming. The language of the executive order reads more like the federal government is not just getting ready to live with cryptocurrency, but might even get involved in it. Biden called for the potential development of a U.S. Central Bank Digital Currency (CBDC). This would be a digital dollar, backed by big banks, that could serve as a conduit for converting cash to crypto and vice versa. It would also make these banks the middleman for crypto transactions, which might undermine some of the privacy aspects of crypto (though, honestly, cryptocurrencies aren’t as anonymous as you think) but also add security and backing to those assets.
That is, in part, why the crypto world ate up the Biden executive order, with one exec calling it “about as good as we could ask.” It seems to signal that rather than squash the scam-ridden digital currencies, the U.S. government might just buy in; skeptics have pointed out that it appears the cryptocurrency lobby has gotten to the Biden White House.
It looks like lawmakers have drank the Kool-Aid. That is good for Bitcoin, because it looks like the federal government is ready to prop up the bottom of the pyramid scheme so it can keep on going.