In order to make sure that the US doesn’t fall behind in the cryptocurrency revolution, the Biden-led administration is working hard to come up with a holistic strategy to define the digital assets and the risk and opportunities associated with them. A formal announcement in this regard can be made as soon as the next month, according to sources privy to the discussion.
Many executive meetings have been done in order to finalize the draft on cryptocurrencies, and the US administration is quite upbeat about taking the lead position in defining the rules and regulations related to the industry. In the past, various Ministries and officials have taken a piecemeal approach, but now things are shifting towards a more holistic perspective that will help to redefine the cryptocurrency in the world’s largest economy.
There are many factors behind this proactive approach taken by Biden’s administration, with the primary one being the threat to the dominance of the Dollar by emerging popularities of digital currencies. These efforts of the Biden administration have come in the backdrop of huge interest that cryptocurrencies, especially Bitcoin, have generated in a couple of last years. As per the latest valuations, Bitcoin was hovering at around $37k on Friday opposed to its value of $69k in the month of November last year.
Many agencies and regulators are simultaneously working on the proposal related to cryptocurrencies, and it’ll cover all aspects related to digital currencies, including their impact on the economy, society, and other issues related to national security. Agencies working on compiling this report will integrate their inputs, and the report is expected to be submitted to the White House in the second half of 2022.
It is also important to note that The Financial Stability Oversight Council has been tasked with conducting a study that will point out the systemic implications related to cryptocurrencies and their impact on the economic and social strata of the country. In addition, other departments, right from the commerce department to the state department, will also participate in conceptualizing the proposal to make sure that the US remains competitive when it comes to the policy related to digital currencies.
It is likely that the US might come up with its own Central Bank Digital Currency (CBDC). This means that a digital coin might be issued by the US government, effectively taking the revolutionary idea of digital currencies forward. However, as the concept of CBDC is still debated among the representative of the Federal Reserve, it is also possible that, for the time being, authorities will hold off their go-ahead on this particular aspect. The possibility of launching its own digital currency might be beneficial for the US, especially in the contexts of many other competitive economies, including China going mulling the launch of their own digital currencies in the near future.