Biden Signs Executive Order
Biden Signs Much Anticipated Executive Order on Cryptocurrencies
The executive order signed today calls on the government to examine the risks and benefits of cryptocurrencies.
"We must take strong steps to reduce the risks that digital assets could pose to consumers, investors, and business protections."
While many critics were wrongly anticipating a full ban on Bitcoin and other cryptocurrencies, the significance of this executive order is still being determined. For now, an outright ban seems increasingly more unlikely. The order calls for a unified approach to examine cryptocurrency markets regarding
"financial stability and financial system integrity; combating and preventing crime and illicit finance; national security; the ability to exercise human rights; financial inclusion and equity; and climate change and pollution."
The executive order also makes the point to promote U.S Leadership in technology and economic competitiveness through establishing a framework for digital assets. While this is still vague, it appears there will be research and development coming out of the Department of Commerce and the Treasury regarding digital assets.
By signing this executive order it is clear that the United States is starting to wake up to the reality that digital assets are not only here to stay, but may be one of the most significant technologies for the decades to come.
The executive order does reference Central Bank Digital Currencies, however, they also allude to current stablecoins.
"Any future dollar payment system should be designed in a way that is consistent with United States priorities (as outlined in section 4(a)(i) of this order) and democratic values, including privacy protections..."
There are really two ways for the United States to lean into digital assets, they can go the Chinese route and lean into closed, privacy-eroding CBDCs; or through their research can learn about the benefits and significance of adopting open, censor-ship resistant, decentralized assets such as Bitcoin.
In our opinion, with the grim long term outlook of the United States fiscal and monetary trajectory, they may have a way to maintain global influence by leading in this space in a way that doesn't stifle the ethos of decentralization. We saw many nations win and lose following the rise of internet adoption. The United States was able to remain on top by allowing innovation to flourish and by not enacting harsh regulations. For their sake, they may want to enact a similar playbook.
Crypto Proponent Yoon Suk-Yeol Wins South Korea’s Presidential Election
Conservative Party candidate Yoon Suk-Yeol, a former top prosecutor who promised to deregulate the crypto industry, will become South Korea’s next president.
This was South Korea’s closest election in history, and cryptocurrency regulation was a surprisingly prominent topic. Yoon’s promise along the campaign has been to de-regulate the crypto industry in South Korea, as well as increase the threshold for capital gains on cryptocurrencies.
To understand the significance of this, one must understand the “Kimchi premium” on cryptocurrencies. In April and May 2021 we saw the difference between South Korean and other crypto exchanges rise to more than 20%; which means that South Koreans were paying this premium for the ability to acquire Bitcoin. With more lenient regulations we may see the fervor for Bitcoin in South Korea only increase.
State Street to Offer Crypto Custodial Services
State Street, the second oldest US bank and largest asset custodian in the world has announced a new crypto custody offering in partnership with Copper, the UK-based custodial startup.
This appears to be another instance of old institutions, understanding the need for a crypto division and strategy. Digital asset growth and popularity is not slowing down, requiring legacy institutions to find some way to maintain relevance.
While custodial headlines like this will only further the mass adoption narrative, it is imperative to understand that the promise of Bitcoin is one of self-sovereignty. As we discuss through several articles, Bitcoin allows you to self-custody, be your own bank and take control of your own finances in a way that may inevitably crumble these legacy institutions.