On the 10th of March, the Biden Administration released the much anticipated executive order on cryptocurrencies within the country. The order reportedly covered many aspects of cryptocurrencies, including their regulations, sustainability, and security. However, what caught the attention of the crypto space is the government’s decision to explore a Central Bank Digital Currency.
Ever since the introduction of Bitcoin, the world governments have had one prominent criticism to make. Cryptocurrencies have been used as a vehicle for illicit activities like money laundering. Still, the larger part of the criticism was based entirely on assumptions, and stats show that fiat money constitutes the majority of such activities. Now, world governments are increasingly changing such perspectives and are considering the possibilities of a virtual currency that operates under the supervision of the Central Bank. The United States of America joins this list through the recent executive order.
According to Said Edul Patel from Mudrex, the government reached this decision after assessing the pros and cons of digital currencies. However, many countries have already made this decision months, or even years, before the USA, he added. It seems that the policies of even larger economies could not outmatch cryptocurrencies, and the recent orders by the USA and India have made it clear. Surprisingly, smaller economies like Nigeria, Bahamas, and Ecuador have already announced their plans for a centralized digital currency.
Still, the crypto space believes that the government’s efforts to assess the US CBDC would naturally consolidate the fragmented regulations found across the states of the USA. Unlike countries like Japan, Singapore, or the United Kingdom, the regulations on Crypto in America are fragmented. This is seen by many as the reason why the industry was not able to thrive despite having such high demand. Ripple’s CEO, Brad Garlinghouse, seems to be welcoming this decision of the government to study the options of regulating digital currencies. He holds this view about the new order after the year-long legal battle of Ripple with the SEC. Reportedly, the lawsuit found some inconsistencies in the claims of the SEC against the cryptocurrency firm.
The executive order also addressed issues like “national security, consumer protection, financial inclusion, and responsible innovation”. Most importantly, a significant portion of the interest was in the impact of cryptocurrencies on the environment. The government will appoint a committee to research the energy consumption of cryptocurrencies to find out more about the situation and implement measures to mitigate them.
Some prominent figures like Billy Markus believe that traditional financial infrastructures account for more carbon emissions. Also, many crypto projects like VeChain and Hedera have already taken initiatives against this cause.