I think in democratic, liberal societies like ours, people want to see regulations, fairness, and transparency,” he says. Sam Kazemian, the founder of the stablecoin Frax, agrees. “So to the extent that this executive order will spur a wide number of agencies to establish some kind of predictable policy rationale behind how blockchain and crypto innovations will be treated, you would think that would enhance enthusiasm for investing in this space.” “There’s a strong case to be made that the lack of regulatory guidance and policy certainty has hindered the ability of responsible investors and entrepreneurs to innovate in this space because they’re unclear of what regulations they may be subject to two, three, four years down the line if they become successful,” says Ariel Zetlin-Jones, an associate professor of economics at Carnegie Mellon University’s Tepper School of Business. But most of the leaders of cryptocurrency platforms are already complying with government know-your-client (KYC) regulations-and have spoken up about the fact that they want more clarity, not less, on their responsibilities. Meanwhile, inside the the crypto world, there are some libertarians who take a hardline view against any sort of regulation. Treasury Secretary Janet Yellen wrote in a statement that she would work under the guidelines of the order to “promote a fairer, more inclusive, and more efficient financial system.” CFTC chairman Rostin Behnam wrote that the order would “ensure greater cooperation and coordination between various cabinet-level agencies.” SEC Chairman Gary Gensler issued a similar statement on Twitter. These agencies publicly fell in line in support on Wednesday. While the order doesn’t specifically say who is in charge, it calls on the various regulators to create a united front and to determine spheres of influence, and a chain of command. Over the past couple years, different governmental agencies have jostled for the authority to regulate cryptocurrencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). “They’re not pre-determining policy outcomes, but rather have a really methodical and thoughtful process to go about finding answers and figuring out where the regulatory gaps are.” Setting the stage for regulatory clarity “They’ve asked a really good series of questions that relate to a lot of policy goals,” she says. ![]() Of course, the executive order isn’t uniformly positive: It lays out the many risks of cryptocurrencies, including the prevalence of scams, its use in illicit finance, and environmental concerns.īut Smith says the detail and nuance of the report show the Biden Administration’s commitment to studying the space carefully. Jeremy Allaire, the co-founder and CEO of Circle, the digital currency company behind the world’s second-largest stablecoin, went a step further, writing on Twitter that the order represents a “watershed moment for crypto, digital assets, and Web 3, akin to the 1996/1997 whole of government wakeup to the commercial internet.” And the market seemed to agree with him: Bitcoin jumped 9% on Wednesday afternoon. ![]() Here the main reasons they’re generally excited. TIME spoke to several leaders in crypto about the executive order. dollar that would be widely available to the general public, and could make digital transactions more secure, faster and cheaper. Central Bank Digital Currency (CBDC)-a digital U.S. It also urges the Federal Reserve to continue exploring the development of a U.S. The order tasks a variety of agencies with studying and planning around cryptocurrency policy in key areas like consumer protection, national security, and illicit finance. “I’m grateful we’re at the point where the utility of this tech has proven to be very obvious to all levels of our government.” “I am pretty darn optimistic about it,” says Alexis Ohanian, the co-founder of Reddit who is now a major investor in crypto technology. Department of the Treasury and other federal agencies to coordinate their efforts to come up with a regulatory plan. ![]() ![]() The order recognized the popularity of cryptocurrencies and directed the U.S. But many crypto insiders were pleasantly surprised when the Administration released its executive order on Wednesday, marking the first time the White House has weighed in formally on cryptocurrencies.
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