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President Biden gives U.S. government cryptocurrency agenda via executive order

Bitcoin
Bitcoin (Image credit: Shutterstock)

What you need to know

  • U.S. President Joe Biden has issued an executive order designed to kickstart the process of forming proper cryptocurrency policy.
  • Cryptocurrency has been involved in many everyday-consumer spaces as well as ransomware-related crimes, meaning policies will need to be crafted around the needs of average citizens as well as to combat cybercriminals.
  • The executive order demands that various agencies and departments formulate studies on cryptocurrency's impacts, the findings of which will be due within the coming months.

The United States' entanglements with cryptocurrency run the gamut. From generic consumer involvement (did you know you can buy movie tickets with Bitcoin?) to pipeline-crippling ransoms, cryptocurrency is cropping up everywhere. And yet, it is largely unregulated and unsupervised. Based on U.S. President Joe Biden's new executive order, that's about to change.

The executive order is lengthy as can be and you can read the full thing over at the White House's website, but here's the core of it: The Biden administration is well aware of cryptocurrency's less savory aspects, such as its involvement in ransom schemes, sanction evasions, theft, and fraud. However, it acknowledges that there could be upsides to crypto, and that the government supports "responsible innovation that expands equitable access to financial services, particularly for those Americans underserved by the traditional banking system."

Having acknowledged the downsides and potential upsides of crypto, the executive order demands that various agencies and departments across the government produce studies to analyze cryptocurrency and have results within the coming months, though due dates vary on a per-study basis. The Biden administration is also placing a premium on researching a potential United States central bank digital currency (CBDC).

In other words, the U.S. is taking a vastly different approach to crypto than El Salvador, which is developing a city dedicated to Bitcoin. If you want to get in on the crypto action yourself, it's not too hard to learn how to mine crypto or learn what the best GPUs for mining are.

Robert Carnevale is the News Editor for Windows Central. He's a big fan of Kinect (it lives on in his heart), Sonic the Hedgehog, and the legendary intersection of those two titans, Sonic Free Riders. He is the author of Cold War 2395. Have a useful tip? Send it to robert.carnevale@futurenet.com.

12 Comments
  • "My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC (central bank digital currencies)." Central bank digital currencies are NOT crypto. It has nothing to do with the blockchain (or at least, need not have anything to do with blockchain tech, and in practice definitely will not have anything to do with blockchain tech). They are all-digital money systems controlled by governments. During a big recession, technically it's cash that holds back central banks from being able to stimulate the economy when interest rates hit zero, especially because the economy is so soft it can't generate any inflation (which is like a negative interest rate). All-digital currency designs eliminate cash and empower central banks to charge negative interest on the balances they themselves hold (which are huge), and that should force more money out into the economy. It's a way of making sure the Great Recession never happens again without having to get Congress to do anything (which is problematic in many ways). The essential stupidity of crypto is that you need to run some resource-consuming processes to create each token, but that's completely pointless. Same with non-fungibility -- pointless. A solution without a problem. In contrast, central banks create and destroy money at will. They simply change their legers. It's the credibility of central banks - the faith that people have that they won't abuse this power - that has been and always will be the heart of monetary policy. Competent governments are what keep currencies stable, not forcing people to run your CPU hot to literally make a buck. The blockchain does nothing to help. If anything, it makes currencies way, way more unstable than even those in high-inflation countries. See Sec. 9, Definitions, in the executive order.
  • This stuff makes my brain hurt.
  • Sorry, I just wasn't clear enough. Successful currencies are stable. That's when they're most useful. If they are growing too much in value (how much real stuff each dollar, say, can buy; high deflation) then there's a tendency to put off purchases. If they're falling too quickly (can buy less and less real stuff with a single dollar; inflation) then people rush to make more purchases. Plus, a stable currency allows us to easily plan because we can believe the dollar values of assets we have won't change much. Currency stability is the very point of currency policy. You get stable currencies by having monetary authorities that don't abuse their power. They have the power to simple make more currency and spend it. It's basically free money. Governments do this all the time. It's a normal part of how the system works. But if they do it too much, the value of the money will fall (inflation); if the problem is really bad, public confidence in the currency will collapse and you get hyperinflation. (Think: Argentina or Zimbabwe in the 90's, or the Weimar Republic.) The whole point is that you have a monetary authority that you can trust to make sure the currency value is stable. Competent governments make efforts to make sure currencies aren't growing too fast or too slowly in value. They do this by (quite literally) creating or destroying money as needed, adding it or removing it from the economy. (These days they do it more through interest rates, but that's a whole other story.) They need to be able to do this in order to keep the currency stable. Cryptocurrencies remove the ability of central authorities to create or destroy money. Very soon it becomes too hard to make enough new crypto to keep the growth in value down (people are buying crypto at a high rate), and values skyrocket. Not long after that, regular people realize that crypto is not very useful (isn't useful for daily purchases, for example) and that the growth of the value may stop, so they start selling -- leading to a huge fall in value. Hyperdeflation, followed by hyperinflation. One look at a graph of bitcoin's price in US dollars and you see what I mean. Crypto is by definition terrible currency because there is no central authority keeping the value stable. Because it's not stable, it'll never be used for regular transactions or for accounting purposes (keeping track of the value of your assets), and its value as an investment asset is a joke. Charles Goodhart's "The Evolution of Central Banks" is a great read regarding how central banks and monetary policy works.
  • Exactly this. Crypto "currencies" serve no purpose other than facilititating illicit transactions. The plague of proof-of-work is utterly pointless and only wastes electricity and drives market shortages of computing components. The decentralized dream is collapsing as the markets consolidate into a handful of trusted exchanges and are subjected to ever growing regulation. These "currencies" are literally ponzi schemes that you pay into with either cash or investments in high end computers and ridiculous power bills. Blockchain technology does have a promising future, especially in the form of trusted legal records, but not in its present implementations.
  • Not all crypto is proof of work nor do all require high end computers... Learn about crypto a little bit more before thinking about commenting to not look moronic
  • Hanley's not looking "moronic" at all. What's crypto without proof of work and distributed leger? Nothing but strings of characters. (Arguably they're still just strings of characters.)
  • I never said all Crypto was proof-of-work. I said that proof-of-work was a plague. I also never said that all Crypto requires high end computers, I merely listed it as one of the entry mechanisms. Try reading rather than flinging personal insults.
  • I agree with everything you say, except that the blockchain has a future in contracts. Just like with good monetary policy, a good system of private law (such as contracts) relies on a trustworthy government. It's the legal system that recognizes valid contracts, and if necessary, enforces them in the courts. To ensure that parties don't single-handedly change the terms of contracts, we make multiple copies. We've been doing this for literally centuries (less so before that because paper and parchment were expensive). It seems to work fine. When was the last time you heard anyone complain that someone changed the terms of a contract without the other parties knowing about it? What court would enforce it? And how would blockchain tech make it any better? Even if we used blockchain to verify contracts (instead of making notarized copies as we do today), we'd still need to rely on the courts to enforce contracts; the first thing they'd do is find out what was actually agreed to by looking at notarized copies. Again, a solution without a problem. An attempt to remove human institutions when the whole point is to make human institutions reliable. Another point is that crypto is as much about ideology and naivete as cynicism and scam artistry. I bet a lot of the people clicking the affiliate links in the WC articles pushing crypto mining are not selling their coin immediately, but holding onto them in hopes of larger capital gains. In other words, they're as naive and ignorant as the buyers, and they may lose big if they haven't already.
  • Crypto is the currency or the underworld and speculators, hackers, criminals, etc.
  • You new here?
  • This article and this company should not encourage mining crypto... The market is terrible enough as it is and all you're doing is adding fuel to the fire! Once upon a time I came to WC and sister sites for news about exciting and cutting edge tech... Now there are loads of opinion articles and adverts about products. Not all of us get tech equipment for free to try out special access to but before it releases... Don't abuse that ability and do you following some justice. In the end I get you're a for-profit company, but you've lost site of what truly matters as do many companies after getting so big. It's now about pumping out articles instead of quality info and insight
  • I think the amount of ads and opinion at WC is fine, but promoting crypto mining is encouraging bad behavior (selling crypto you mine is taking advantage of naive "investors", who are very likely to lose) and making a profit out of it. I do think that's something Future needs to reconsider.