President Biden Directs Federal Agencies to Coordinate on Crypto Regulation Strategy
President Joe Biden signed an executive order on cryptocurrency on Wednesday, marking the White House’s first concrete steps toward regulating digital currency. Following the announcement of the executive order, both Bitcoin and Ethereum experienced initial price increases, but both dropped back within hours.
The executive order underlines what government agencies, including the Treasury Department, must do to develop cryptocurrency policies and regulations. It also directs US agencies to ensure that the country’s cryptocurrency laws are consistent with those of US allies, and it charges the Financial Stability Oversight Council with investigating any illicit financial concerns. Additionally
Furthermore, the order emphasizes the importance of a new government-issued central bank digital currency.
“Governments alone cannot solve these problems, especially if they operate in silos.” “This E.O. is the result of months of collaboration with stakeholders from government, industry, advocacy, academia, and international allies and partners – to identify actions we can take to foster responsible innovation in the digital asset ecosystem,” said National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan in a statement.
People all over the world have been inspired to contribute to Ukraine’s defense against Russia, and cryptocurrency has provided a novel way for them to do so. More than $50 million in cryptocurrency was donated after the Ukrainian government tweeted a request for donations. In addition, the Ukrainian government announced plans to mint NFTs to fund its military. On the other hand, there are growing concerns about Russia using cryptocurrency to avoid sanctions, and the US Treasury is concerned about Russian cyberattacks on cryptocurrency companies. Scammers are also taking advantage of Russia’s invasion of Ukraine to steal money from people who want to help.
The president’s new directive comes at a time when cryptocurrency has emerged as a critical component of Russia’s war against Ukraine. According to the Ukrainian government, the war has forced 1.2 million Ukrainians to flee since February 24, and more than 2,000 Ukrainian civilians have been killed. The human costs of the war are already high, and there is no end in sight.
The situation has increased volatility in the cryptocurrency market, which experts predict will continue. The growing popularity of cryptocurrency, as well as its recent integration with the stock market, binds it even more tightly to the international conflict. Bitcoin is hovering around $40,000, having dropped below $35,000 immediately after the attack, and Ethereum is back below $3,000. In any case, experts advise against making financial decisions based on news-related panic.
“Ultimately, your ability to stay diligent and stay invested is what will lead to success or failure,” Douglas Boneparth, a certified financial planner and founder of Bone Fide Wealth, recently told NextAdvisor. Here are some more examples of how cryptocurrency is playing a role in the fast-paced conflict:
According to research firm Elliptic, as reported by The Wall Street Journal, cryptocurrency fraudsters are seizing the opportunity to steal donations intended for struggling Ukrainians. A group posing as the Ukrainian government allegedly solicited donations for the cryptocurrency Peaceful World, which rose to $50 million even after it was exposed as a forgery. According to blockchain researcher Chainalysis, the crypto world is no stranger to scams, with $14 billion going to con artists in 2021.
An NFT of Ukraine’s flag raised over $6.7 million to assist Ukrainians affected by Russia’s invasion. UkraineDAO, which is backed by a member of the feminist punk band Pussy Riot, spearheaded the effort. MykhailoFedorov, Ukraine’s Vice Prime Minister and Minister of Digital Transformation, announced plans to issue the country’s own NFTs to support the country’s armed forces. Since the invasion, efforts to assist Ukrainians affected by the attack have raised more than $50 million in cryptocurrency donations.
The US Treasury Department has warned cryptocurrency companies to be vigilant about cybersecurity, citing concerns that Russia may launch a cyberattack in retaliation for US sanctions. As the crypto industry grows and thus poses more risk, officials have been in discussions with trade groups and exchanges to ensure assets remain safe and secure.
Bitcoin is the most valuable cryptocurrency in terms of market capitalization, and it serves as a good barometer for the overall crypto market, as other coins such as Ethereum (and smaller altcoins) tend to follow its trends. Despite the fact that Bitcoin recently set a new all-time high, it was a fairly normal uptick for the cryptocurrency, which is notorious for its volatility. That is not to say that investors should ignore swings in either direction, and it is also why investing experts advise against making major investment changes based on normal fluctuations.
Cryptocurrency is still in its early stages, and everything from innovation to regulation can have a significant impact on investors. Here’s how to invest wisely, regardless of what’s in the news or the price of Bitcoin.