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The White House Considers Cryptocurrencies a Matter of National Security

CryptocurrencyJan 28, 2022 10:00AM ET
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The White House Considers Cryptocurrencies a Matter of National Security

  • In the coming weeks, the White House will present an executive action instructing various federal agencies to take charge of coordinating the development of a cryptographic regulatory framework proposal.
  • The Biden administration wants to bring order to the issue of cryptocurrencies, considering that until now it has had a messy approach within the government.

The federal government plans to issue an executive action to regulate Bitcoin and other digital assets as a matter of national security, the specialized medium Barron’s, revealed citing a source familiar with the Biden administration’s plan.

Since the beginning of his administration, President Joe Biden has shown interest in regulating cryptocurrencies as soon as possible, considering that they are an extraordinary source of tax revenue for the government.

According to the source, the administration will soon issue a national security memorandum to task various federal agencies with creating a general regulatory framework that includes the entire industry. That is, cryptos, stablecoins, and non-fungible tokens (NFTs).

Design of a coherent regulatory policy

The initiative will be coordinated by the Treasury Department and the State Department, with the participation of the National Economic Council and the Council of Economic Advisors. The National Security Council of the White House will also participate, in view of the economic implications that cryptocurrencies have for national security.

“This is designed to take a holistic look at digital assets and develop a set of policies that give coherence to what the government is trying to do in this space,” the source said. The work of government agencies must be coordinated with other allied countries that are currently working on the regularization of crypto assets, it explained.

"Because digital assets don't stay in one country, it’s necessary to work with other countries on synchronization." The time frame for submitting crypto rule proposals would be three to six months, with the White House serving as policy coordinator. However, White House officials did not comment on this point, the outlet noted.

The United States Congress has also been interested in the regulatory issue. In the closing months of last year, it convened several hearings with government agencies, including the SEC, and with CEOs of major crypto exchanges to provide their views on the regulations.

The Biden administration sees the cryptocurrency issue as having a messy approach so far and wants to bring order, the source said. The crypto industry has been overseen by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission.

On the Flipside

  • In Congress there is no consensus on key aspects for the regulation of cryptocurrencies between Democrats and Republicans. But neither is there within the Biden administration itself.
  • The dissent ranges from whether or not to treat certain tokens as securities to how to oversee exchanges, as well as high-yield lending products and stablecoins.

Why You Should Care

  • In November, the government urged Congress to accelerate the debate on establishing a regulatory framework for crypto assets, in connection with the publication of a report related to stablecoins.
The other body that has been very interested in the regulatory issue of cryptocurrencies and the issuance of a central bank currency (Digital Dollar – CBDC) has been the Federal Reserve.

Although it is believed that this digital dollar project will still have to wait a few years before materializing. Despite the fact that China and Russia, together with other countries, have made great progress on this matter.

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The White House Considers Cryptocurrencies a Matter of National Security
 

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Maduser Ali
Maduser Ali Jan 28, 2022 5:22PM ET
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Clay Douglass Jan 28, 2022 10:35AM ET
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Biden is a disaster.
 
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