According to reports, the Biden Administration will issue an order directing government agencies to conduct risk analysis on bitcoin as a national security concern.
According to a source “familiar with the White House’s plan,” the order will be published in a national security memorandum. In his memo, Biden would task certain federal agencies with researching cryptocurrencies, stablecoins, and nonfungible tokens (NFT) in order to establish a workable regulatory framework.
The source was quoted as stating:
“This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space.”
There have been reports of a potential executive order on cryptocurrency circulating recently. According to Forbes, government agencies will issue reports on their findings by mid-2022, examining “the systemic risks of cryptocurrencies and their unlawful applications.”
According to Bloomberg’s Eric Balchunas, the Biden Administration’s concern that crypto is a national security risk might be why no Bitcoin (BTC) spot ETFs have been approved. In a Jan. 28 tweet, he referred to the new rules as a “broader crypto crackdown.”
Biden Administration and Bitcoin
Another concern for the crypto industry came from House Democrats on January 25, when they introduced the America COMPETES Act. Jerry Brito, Executive Director of Coin Center’s Washington D.C.-based think tank, stated that one provision in the draft legislation would allow Treasury Secretary Steve Mnuchin to shut down cryptocurrency exchanges without providing advance notice.
1/ ? IMPORTANT ?
Included in the America COMPETES Act just introduced in the House, and which will very likely pass in some form, is a provision that would be disastrous not just for cryptocurrency but for privacy and due process generally. https://t.co/vLJLnIhQhB pic.twitter.com/1EC0SBaetk
— Jerry Brito (@jerrybrito) January 26, 2022
Lawmakers in Congress are attempting to smooth out the rough edges of existing legislation, with supporters among members pushing for further changes. A bipartisan group of House representatives has urged Biden-nominated Treasury Secretary Janet Yellen to clarify aspects of the Infrastructure Bill that relate to digital assets, echoing pleas from crypto industry experts. Last November, the Infrastructure Bill was passed into law despite some criticism, because its definition of a “broker” is arguably too broad and includes miners, software developers, transaction validators, and node operators.
On Jan. 26, a group of bipartisan lawmakers proposed narrowing the scope of information that a broker can obtain to prevent creating an “unlevel playing field for digital assets and those required to execute transactions in them.” As presently defined in the bill, some brokers do not have the ability to validate information about crypto senders and recipients as required by law. Yellen has yet to respond to this request.