Does Biden Support Bitcoin: Understanding the Impact of US Government Involvement in Cryptocurrency
The recent utive order signed by U.S. President Joe Biden has reignited discussions on the future of cryptocurrencies, including Bitcoin. This order marks a significant step towards shaping the government's stance on digital assets, which could have far-reaching implications for both investors and the broader industry.
What is Biden's Stance on Crypto?
Biden's utive order primarily focuses on exploring the possibility of launching a central bank digital dollar (CBDC). While this might initially be seen as a competitor to existing cryptocurrencies like Bitcoin and stablecoins like USDT, the response from the crypto community has been surprisingly positive. Following the announcement, crypto markets surged by nearly 10%, indicating a level of confidence in the Biden administration's approach to blockchain technology.
The order acknowledges the importance of blockchain technology and seeks to study and cultivate its potential. It also emphasizes a measured regulatory framework, which helps alleviate market fears of overzealous government intervention. However, the order does caution against the risks associated with criminal activities and money laundering, which could increasingly be facilitated by cryptocurrencies.
Can the Government Regulate Crypto?
The U.S. government's approach to cryptocurrency can be described as promoting "responsible innovation." Biden recognizes the transformative potential of blockchain technology in consumer banking but also aims to protect citizens from market volatility and improper usage. In the long term, the plan is to develop a digital dollar, though the utive branch admits that the project could take several years to fully launch.
Regardless of the timeline, the U.S. government and monetary authorities will retain full control over the CBDC. There is a concern, however, about whether the introduction of a digital dollar will result in the heavy regulation or suppression of decentralized networks like Bitcoin and Ethereum, in order to encourage more users to adopt the CBDC. While such an outcome is foreseeable, it is not immediate. The U.S. may be late to the global CBDC race, as nine countries have already launched their digital currencies, and over 15 others are in the development phase.
Crypto and the U.S. Government
Biden's recent order signifies a formal acknowledgment of the challenges decentralization poses to traditional monetary regulations. According to a February 2022 survey, one in five American citizens already holds some form of cryptocurrency, and over half of those over 50 would consider using a traditional bank to invest in crypto. This data suggests that centralized banks may not be replaced as quickly as some DEX proponents hope.
In response to this growing demand, some commercial banks are exploring opportunities to offer crypto-related products in the near future. As of 2022, one out of ten banks has shown interest in offering crypto services to their customers.
Given the current landscape and these survey results, it is clear that the U.S. government's stance on cryptocurrency has been influenced by popular demand from both individual consumers and financial enterprises. The Biden administration's approach aims to balance innovation with regulation to foster a safer and more sustainable ecosystem for digital assets.
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