On March 8, President Joe Biden directed federal agencies to coordinate their efforts at drafting cryptocurrency regulations in a first-of-its-kind executive order. According to a fact sheet accompanying the order, the “whole-of-government” effort to regulate the crypto industry focuses on six key priorities: consumer protection, financial stability, illicit uses, leadership in the global financial sector, financial inclusion and responsible innovation.
While the executive order sounds like a potential race to solidify the United States at the forefront of digital assets, it outlined no specific agency positions. That leaves the industry with regulation, no doubt, in the near future but with little firm guidance regarding the regulation’s look.
Cryptocurrency, also known as crypto, is a digital currency designed to work as a medium of exchange. At its core, cryptocurrency is decentralized digital money intended for use over the internet. Cryptography is used to secure and verify transactions and control unit expansion. Many cryptocurrencies are built on a distributed ledger enforced by a network of computers.
This network is commonly referred to as blockchain technology. Cryptocurrencies are distinguishable from FIAT, or currency backed by government decree because a central authority does not issue the asset. This decentralization makes crypto potentially impervious to government intervention and manipulation.
Digital assets, at their most fundamental, were intended to democratize finance the way the internet democratized content, opportunity and the spread of knowledge. Before the internet, only a few designated authors could create content. Today, anyone is capable of creating and sharing their thoughts with easy global access. Digital assets hope to allow democratized access similarly. Fractionalization and transferability enable equal access to investors of all sizes into the space. No longer is an investment in a market relegated to…
