The crypto industry breathed a sigh of relief Wednesday as U.S. President Joe Biden finally unveiled his hotly anticipated executive order on crypto.
The order will direct federal agencies to take a unified approach to regulating crypto, tasking them with working together to address the risks of crypto – including consumer protection issues, national security implications, and threats to the financial system – but also calling them to support crypto innovation and ensure the U.S. maintains “technological leadership in this rapidly growing space.”
The order has been the source of much handwringing in the crypto community since its announcement in October. Many were concerned the order would call for sweeping regulatory crackdowns on crypto; the relatively light-touch approach revealed in the fact sheet – no new regulations on the sector and no thumb on the scale for what specific positions the Biden administration wants agencies to adopt – were met with widespread relief.
“It was better than I thought it was going to be,” said Kristin Smith, executive director of the Blockchain Association, a Washington, D.C.-based crypto industry group. “Given all of the FUD that has been out there about a regulatory crackdown, I think this is obviously in stark contrast. This is much more positive and thoughtful.”
Big players in the crypto industry took to Twitter on Wednesday to share their thoughts on the executive order. Sam Bankman-Fried, CEO of crypto exchange FTX and a major Biden donor, called the order “constructive.” Circle CEO Jeremy Allaire praised the order’s focus on the rapid growth of crypto and its calls for “constructive problem solving around known risks that exist with the legacy financial system.”
Many industry participants hope the executive order will address the current, fragmented regulatory environment in which regulation is often achieved through enforcement actions by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In a statement provided to CoinDesk, Anchorage Digital co-founder and CEO Nathan McCauley called the order a “shot in the arm for crypto” and said that, to strike the balance of “responsible innovation” called for by Biden, “the crypto community needs to recognize that – for the benefit of our industry – regulators have a role to play in the crypto ecosystem.”
“Today’s executive order makes it clear: This isn’t them-against-us,” McCauley said.
Candace Kelly, general counsel for Stellar, echoed McCauley’s sentiment.
“Today's order is the first step in what will likely be an extended process to get the industry the clarity we've been seeking,” Kelly told CoinDesk. “We now have a much better understanding of the government's intentions and roadmap for digital assets and a commitment to support innovation in this space.”
A long road ahead
While the promise of regulatory clarity is exciting for many in the crypto sphere, Kelly pointed out that input from industry participants will be key.
“If the desire to get this right is genuine – and we hope it is – it's critical that industry is part of this process and engages in this process every step of the way,” Kelly said.
Crypto lobbying boomed in 2021, but Smith told CoinDesk the executive order means the industry’s efforts to engage with the government will get even more intense.
“There are going to be a lot of questions, a lot of policy solutions proposed, and it’s incumbent upon us in the industry to be a resource to policymakers and bring our own thoughtful solutions to the table,” Smith said.
The process will not be a quick one. The executive order called for agencies, including the Treasury Department, to conduct research and submit reports to the White House on various crypto-related issues – all which can take up to six months.
“This is a very long road ahead on the policymaking front,” Smith said. “But I think this is the place we want to be … it’s the right framework to be thinking about how to regulate the space.”
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