Bitcoin up 8% after Biden announces executive order on cryptocurrencies
- Bitcoin and other cryptocurrencies were higher on Wednesday after President Joe Biden announced his highly anticipated executive order on digital assets.
- Biden's executive order attempts to address the lack of a framework for the development of cryptocurrencies in the U.S., which critics say could leave the country's industry behind the rest of the world.
Cryptocurrencies were higher Wednesday after President Joe Biden announced his highly anticipated executive order on digital assets that took a supportive stance toward the industry.
Bitcoin was last trading at $41,944, around 8% higher, according to Coin Metrics. Other cryptocurrencies including ether were also sharply higher.
The executive order, which attempts to fix the lack of a framework for the U.S. development of cryptocurrencies, has been broadly welcomed by the industry and its investors. Critics have said the lack of regulatory clarity could hold the U.S. back when it comes to crypto for the rest of the world to leapfrog. The lack of regulatory clarity has also been cited often as the barrier to greater institutional adoption in the crypto market.
"[It's] unequivocally bullish for the crypto ecosystem over all timeframes," said Travis Kling, CEO at Ikigai Asset Management. "It's easy to lose sight of how much ground this ecosystem has covered in the last two years in terms of legitimacy and stance from the US government, but this E.O. makes it clear the US government is not banning crypto, it is embracing it."
The order also calls for measures to protect American consumers, investors and businesses, and to protect the U.S. and the global financial system and mitigate systemic risk.
Additionally, it directs the U.S. government to explore "the technological infrastructure and capacity needs for a potential" central bank issued digital currency.
Treasury Secretary Yellen said in her statement Wednesday that the executive order "calls for a coordinated and comprehensive approach to digital asset policy."
The executive order kicks off a six month long process for the regulatory agencies with jurisdiction in crypto to examine the industry. AT the end of the six months, after seeing the results of the study and investigation, there could be specific policy proposals from different regulatory agencies, Kristin Smith, executive director of the Blockchain Association, told CNBC's "Crypto World" Wednesday.
"The downside and the risk is that the government will go through this analysis and ultimately recommend measures that are more stringent than the crypto industry will be able to manage and that ultimately could drive innovation overseas," she said.
Smith added she isn't concerned that will happen across the board.
"We're going to have a very good opportunity to engage," she said. "As the education level about the industry goes up, policymakers are much more open to what we believe in the industry to be reasonable policies."