Biden Has His Eye on Bitcoin
One of the surest fire ways for a government to look like it’s doing something is to commission a report. President Joe Biden’s hotly anticipated executive order on cryptocurrency released last week was chock full of such time-buying busywork for basically every federal agency. Everyone from the Department of the Treasury to the Environmental Protection Agency has been tasked with a slew of reports, commissions, and frameworks to study digital assets and how they affect established government authorities.
The resulting EO was greeted by a sigh a relief from the cryptocurrency industry, which had (unnecessarily) feared it portended harsh crackdowns from the feds. After weeks of doomsaying, the Bitcoin price jumped up once everyone had the chance to review the text.
Instead of harsh cryptocurrency sanctions for the purpose of furthering international sanctions, the EO mostly talked about the need for the United States to “lead on innovation”—albeit in whatever way the Biden administration considers to be “responsible and equitable”—with some redundant language about exploring the possibility of creating a “digital dollar” or central bank digital currency (CBDC), an undertaking several years underway at different Federal Reserve banks.
It’s not all good news. Inviting the entire federal government to scrutinize bitcoin and related technologies under a microscope will invite many excuses to try to control a liberating ecosystem at odds with the Washington status quo. Some of the EO’s priorities—political buzzwords like climate change and financial equity—indicate inherent allergies to the open nature of permissionless blockchains. And while this order is not the first to discuss an American CBDC, we should be wary of a whole-of-government move towards a cashless world with mandated government-controlled digital currencies.
Still, the EO is a lot better than it could have been. It was inevitable that governments would turn more attention to bitcoin as it grew bigger and stronger. At the very least, this directive falls far short of enacting any policy at all, let alone hostile ones, and even gives some lip service to the need for America to lead on “blockchain technology.”
Typically, documents that are supportive of some new development will start off with a few flowery sentences about its promise and potential. This order does not even bother with such niceties, instead kicking off with some causes for government concern: consumer and investor protection, financial stability, crime, national security, “human rights,” financial inclusion and equity, and climate change. It then spares a few words for “responsible innovation,” meaning controlled development on the kinds of things that the government would like: “cross-border funds transfers” and “cost-efficient access to financial products and services,” maybe just accomplished with a CBDC.
It’s these concerns that are inherently objectionable on their own. It’s true that cryptocurrency exchanges and services have succumbed to cybersecurity failures and expensive data breaches. Few, if any, in the cryptocurrency community would disagree that “digital payments ecosystems should…include privacy and security in t
Article from Reason.com