As fears that Russian oligarchs will use bitcoin to bypass harsh sanctions push the regulation of cryptocurrencies to the top of the political agenda, President Joe Biden is about to take real action, according to reports.
In the coming days he will tell federal agencies to take several months to report “examine potential regulatory changes, as well as the national security and economic impact of digital assets,” Bloomberg said Tuesday (March 7), citing anonymous sources.
That does sound a bit less ambitious than the unsourced reports in late January that lead Bloomberg to predict that federal agencies would be tasked with designing a comprehensive strategy for cryptocurrencies and central bank digital currencies (CBDCs).
See also: Biden’s Executive Order May Trigger Crypto Regulatory Spree
Last week, Acting Federal Reserve Chairman Jerome Powell told the House Financial Services Committee that the conflict “underscored the need for Congressional action on digital finance including cryptocurrencies.”
“We have this burgeoning industry which has many parts to it, and there isn’t in place the kind of regulatory framework that needs to be there,” Powell added.
If that sounds to you like the clear digital asset regulatory framework the crypto industry has been asking, lobbying and begging for since sometime around 2018 isn’t coming anytime soon — well, that might be the case.
Related: Crypto Regulation Discussions in Congress Are Becoming More Sophisticated
How Fast Is Fast
As underwhelming as the report sounds, that may be an unfair take. The actual wording could be a hard push to get to the semi-final round now, or it could be the start of a long series of discussions taking place formally that have been taking place informally for quite a while now.
Besides, government does not move very quickly when an entirely new industry is brought into the regulatory system, and with fairly good reason: Getting it wrong could do far more damage than doing nothing.
Read more: Regulating Crypto Will Drive Innovation if Done Right, Economist Argues
An executive order could be exactly the match needed to set off the long-time-coming burst of regulatory fervor that will set the ground rules and shape the direction of the cryptocurrency and blockchain industry for decades.
Start with whether or not Securities and Exchange Commission Chairman Gary Gensler gets his way on labeling just about every cryptocurrency out there a security subject to his agency’s tough and onerous oversight.
See also: Gensler: SEC Is Coming for Crypto Exchanges
Then, look at the recent proposal by the President’s Working Group of Financial Markets’ November stablecoin report, which recommends that all of the fiat-backed, dollar-pegged cryptocurrencies should only be issued by a regulated and federally insured bank.