It was a matter of time before the United States became interested in cryptocurrencies: it already plans to regulate them

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The United States is going to regulate cryptocurrencies and evaluate the creation of a digital dollar. Joe Biden has signed an executive order on Wednesday that seeks to supervise and create policies on digital assets, as well as encourage research on a government-backed cryptocurrency.

The intentions behind the regulation. It’s a statement, The White House interprets the rise of digital assets as “an opportunity to strengthen US leadership in the global financial system and on the technological frontier.” At the same time, it wants to address “consumer protection, financial stability, national security, and climate risk,” a concern long shared by various government regulators.

Road to a digital dollar? In addition to the announced measures, the Biden administration also wants to further investigate the possibility of issuing a US-backed cryptocurrency, possibility already studied by the Federal Reserve.

Question of percentages. According to the White House, digital assets have experienced enormous growth in recent times. Five years ago, the market capitalization was around $14 billion. In November 2021 this exceeded 3 billion dollars. Furthermore, about 16% of adult Americans, approximately 40 million people, have invested, exchanged or used cryptocurrencies.

Global trend. More than 100 countries are exploring the use of cryptocurrencies and CBDCs (digital currencies issued by a central bank). Russia has concluded that banning them is a bad idea and is going to regulate them. And, according to various experts, they are a potential tool to avoid the sanctions imposed by the West since the invasion of Ukraine.

In the EU, different proposals have emerged in relation to cryptocurrencies, among them, that all transactions can be traced to know their sender and receiver. At the same time, the European Commission is working on the development of the digital euro, the regulation of which would be ready by 2023.

In a much riskier bet —and unique in the world— Bitcoin became legal tender in El Salvador. However, this has brought him problems with the IMF, which will not grant loans to the country until it reverses that decision.

A long-term plan. US intentions to regulate cryptocurrencies and evaluate a digital dollar will not take effect immediately. A large number of federal agencies that, in one way or another, touch the cryptocurrency universe must agree to develop coordinated actions, something that could take years.

In principle, the Treasury Department will study the impact of cryptocurrencies on financial stability and national security. It will also address the implications of digital assets and changes in financial markets for companies, investors and consumers.

The effects. It may or may not be related, but the truth is that after Joe Biden’s announcement the price of bitcoin has risen more than 9%. At the time of writing this article, it stands at $42,278.20. For its part, Ethereum reaches $2,744.19registering a rise of more than 6%.

Price of Bitcoin and other cryptocurrencies: how to watch it at all times to know its evolution

Images | unsplash | The White House

The United States is going to regulate cryptocurrencies and evaluate the creation of a digital dollar. Joe Biden has signed…

The United States is going to regulate cryptocurrencies and evaluate the creation of a digital dollar. Joe Biden has signed…

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