The federal government is creating a policy to oversee how cryptocurrency is used in the U.S.
In a new fact sheet, the White House states that President Joe Biden will sign an executive order outlining the first federal government approach to managing digital assets (such as cryptocurrency) and their underlying technology.
Cryptocurrency (such as the well-known Bitcoin format) is a nearly-anonymous, decentralized, peer-to-peer online currency which is based on blockchain technology. Blockchain serves as a real-time, single ledger verifying all transactions conducted on the blockchain network.
Specifically, the executive order calls for measures to:
- Assess and develop policy recommendations, including changes in financial markets. The order also encourages regulators to ensure sufficient oversight and safeguard against any economy-wide financial risks posed by cryptocurrency.
- Encourage the Financial Stability Oversight Council of the Treasury Department to identify and mitigate economy-wide financial risks posed by cryptocurrency, and to develop policy recommendations to address any regulatory gaps.
- Mitigate risks from illicit use of cryptocurrency. It also directs agencies to work with U.S. allies to ensure international frameworks, capabilities, and partnerships are aligned and responsive to risks.
- Direct the Department of Commerce to work across the U.S. government in establishing a framework to drive U.S. competitiveness and leadership in cryptocurrency.
- Provide safe, affordable, and accessible financial services as a U.S. national interest. The Secretary of the Treasury will produce a report on the future of money and payment systems, including implications for economic growth, financial growth and inclusion, and national security.
- Study and support technological advances in the responsible development, design, and implementation of cryptocurrency systems while prioritizing privacy, security, combating illicit exploitation, and reducing negative climate impacts.
- Explore a U.S. Central Bank Digital Currency (CBDC), including by assessing the technological infrastructure and capacity needs. This effort prioritizes U.S. participation in multi-country experimentation and development of aligned international capabilities with U.S. allies.
Cryptocurrency grows in popularity
Cryptocurrency is slowly expanding as an accepted form of retail payment by retailers including Newegg, Camping World, and Sheetz. Walmart and Amazon have both signaled interest in cryptocurrency with job listings.
According to a recent surveyof U.S. consumers from software and payments company Cantaloupe Inc., more than one-third of respondents between the ages of 18-54 own cryptocurrency, with people ages 18-34 most likely to own it (37%), and individuals 35-54 (33%) trailing only slightly.
Furthermore, 67% of those who own cryptocurrency are willing to consider using it for purchases if it were linked to a mobile wallet, with an additional 19% saying they would consider using cryptocurrency linked to a mobile wallet if it were easy.
Cryptocurrency ownership skews toward affluent consumers, with 41% of respondents who earn more than $100,000 a year owning cryptocurrency, compared to 24% of those who earn less. Only 46% of respondents over the age of 55 would use cryptocurrency linked to a mobile wallet, compared to 68% of those ages 35-54, and 70% of those 18-34.
"The Biden Administration has taken a major step in directing an ordered approach to consideration of the use of blockchain technology, central bank digital currency and related developments into the U.S. and global payments system,” Joseph Lynyak III, partner at international law firm Dorsey & Whitney, said in commentary to Chain Store Age. “The Executive Order is a somber assessment of potential benefits of this technology, and orders numerous federal agencies to consider digital currency as possibly providing advantages to the current payments system but without continuing the threat that many digital currencies present for money laundering and related criminal activity."