Here’s how presidents and governments can play a role in crypto |
February 20, 2023
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Today is Presidents’ Day, 🇺🇸 so we decided to take a dive into the role that presidents play in crypto, since they have an immense influence on the regulatory and policy environment surrounding the industry.
By the way, if you’re interested in learning more about the intersection of cryptocurrency and government, be sure to subscribe to the State of Crypto newsletter, written by Nikhilesh De, CoinDesk’s managing editor for global policy and regulation.
– CoinDesk staff
The Role Presidents Can Play in Shaping Crypto
(Burazin/GettyImages)
Presidents can play a significant role in crypto regulation by implementing policies to ensure that the use of cryptocurrencies and blockchain technology is safe and secure for consumers, while also preventing criminal activities such as money laundering and terrorist financing.
Here are some ways that presidents can potentially affect the crypto industry:
Executive orders: In the United States, presidents can issue executive orders to direct government agencies to take certain actions, such as implementing regulations or policies related to cryptocurrencies.
Appointments: Presidents can appoint officials who are responsible for regulating the crypto industry. For example, in the United States, the president appoints the head of the Securities and Exchange Commission (SEC), which plays a key role in regulating cryptocurrencies.
Legislative proposals: Presidents can propose legislation to regulate cryptocurrencies and blockchain technology. In the United States, the president has the power to approve or veto laws related to the crypto industry.
Public statements: Presidents can use their platform to make public statements on cryptocurrencies and blockchain technology. Such statements can have an impact on public opinion and can potentially influence the regulatory environment.
How Governments Can Regulate Crypto
Here are just a small handful of the ways:
Licensing and registration requirements: Governments can require cryptocurrency businesses to obtain a license or register with regulatory authorities. This can help ensure that these businesses are operating in compliance with applicable laws and regulations, and provide a mechanism for oversight and enforcement.
Anti-money laundering (AML) and know-your-customer (KYC) regulations: Governments can require cryptocurrency businesses to implement AML and KYC procedures to prevent criminal activities such as money laundering and terrorist financing.
Taxation: Governments can impose taxes on cryptocurrency transactions and profits, similar to traditional financial transactions.
Consumer protection: Governments can set rules to protect consumers from fraudulent or deceptive cryptocurrency schemes, such as Ponzi schemes or ICO scams.
Monitoring and enforcement: Governments can monitor the use of cryptocurrencies and blockchain technology and enforce applicable laws and regulations to ensure compliance and prevent criminal activities.
Check out a Few of Our Past Issues on Presidents and Crypto Regulation:
Crypto firms have been eagerly awaiting a series of U.S. government reports they hoped would clarify what the Biden administration and regulators intend to do about digital assets. Most of the documents are out now, but the picture remains murky.
However, one aspect is becoming increasingly clear: the federal government sees a lot of potential risks in crypto, and the various agencies believe stepping up enforcement actions may be an important step.
The reports from the Treasury Department largely recommend the government continue assessing crypto risks, keep up enforcement actions and push forward with work on a digital dollar (without recommending the U.S. should have one).
The White House Office of Science Technology and Policy likewise published a report assessing the technical aspects of a digital dollar, while the Commerce Department’s report addressed competitiveness more broadly. The Justice Department said it would launch a “Digital Asset Coordinator Network,” a group of 150 federal prosecutors nationwide who would specialize in investigating and prosecuting crypto crimes.
The reports are a response to President Joe Biden’s executive order on digital assets, signed in March, which directed federal agencies to analyze different aspects and issues around the cryptocurrency ecosystem and provide recommendations for how the U.S. can both be a leader in the digital asset sector worldwide, as well as address any monetary stability or consumer protection risks posed by the burgeoning industry. Agencies will publish a total of 21 reports.
Want a recap of where former President Donald Trump left things off with regards to crypto just two weeks after Biden took over? Donald Trump may have been anti-crypto but his appointed regulators ushered in a largely industry-friendly regime.
Brainard has been leading the U.S. Federal Reserve’s work on a potential digital dollar and has been minding the store on crypto policy discussions until the central bank appoints its permanent vice chair for supervision.
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
