The White House Considers Cryptocurrencies a Matter of National Security

In the coming weeks, the White House will be presenting an executive action order instructing various federal agencies to take charge of coordinating the development of a cryptographic regulatory framework proposal.
The Biden administration wants to bring order to the issue of cryptocurrencies, considering that, until now, the U.S. government has had a messy approach to the blooming technology.

The federal government plans to issue an executive action to regulate Bitcoin and other digital assets as a matter of national security, specialized medium Barron’s revealed, citing a source familiar with the Biden administration’s plan.

Since the beginning of his administration, U.S. President Joe Biden has shown intent to regulate cryptocurrencies as soon as possible, with the view that they are an extraordinary source of tax revenue for the government.

According to the source, the administration will soon issue a national security memorandum to task various federal agencies with creating a general regulatory framework that includes the entire industry, that is, cryptocurrencies, stablecoins, and non-fungible tokens (NFTs).

The Design of a Coherent Regulatory Policy

The initiative will be coordinated by the Treasury Department and the State Department, with the participation of the National Economic Council, and the Council of Economic Advisors. The National Security Council of the White House will also advise, in view of the economic implications that cryptocurrencies hold for national security.

“This is designed to take a holistic look at digital assets and develop a set of policies that give coherence to what the government is trying to do in this space,” the source said.

The work of government agencies must be coordinated with other allied countries that are currently working on the regularization of crypto assets, it explained.

"Because digital assets don't stay in one country, it’s necessary to work with other countries on synchronization."

The time frame for submitting crypto rule proposals is reported to be three to six months, with the White House serving as policy coordinator, however, to date, White House officials have made no official comment on this, the outlet noted.

The United States Congress has shown interest in the issue of regulation. In the closing months of 2021, it convened several hearings with government agencies, including the SEC, and with CEOs of major crypto exchanges to elicit their range of views on any potential regulations.

The Biden administration sees the cryptocurrency issue as having had a chaotic and tangled approach so far and wants to bring it to order, the source said. Up to now, the crypto industry has had oversight from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission.

On the Flipside

In Congress there has been a lack of consensus between Democrats and Republicans on key aspects of crypto regulation. But neither is representative of the Biden administration itself.
The dissent ranges from whether or not to treat certain tokens as securities, to how to oversee exchanges as well as high-yield lending products and stablecoins.

Why You Should Care

In November, the government urged Congress to accelerate the debate on establishing a regulatory framework for crypto assets in connection with the publication of a report related to stablecoins.

The other body to have shown interest in the regulatory issue of cryptocurrencies, and the issuance of a central bank currency (Digital Dollar – CBDC), has been the Federal Reserve.

Although it is believed that the digital dollar project will not come to fruition for a few years yet, despite the fact that China and Russia, among other countries, have made great progress in the matter of their own.