After months of serious thinking and talking about what to do vis-à-vis cryptocurrencies and stablecoins, the Biden administration has come to a conclusion: What the matter needs is several months more serious thinking and talking, albeit in a somewhat more structured way.
The order, under development for months, will coordinate efforts among financial regulators to better understand the risks and opportunities presented by digital assets, particularly in the areas of consumer protection, national security and illicit finance…. The directive calls on the government to assess the potential to develop a central bank digital currency — essentially a digital dollar — that would be used to modernize payment systems.
In fairness to the administration, those with much more certainty about the benefits and future of digital currencies—specifically, the voting members of “decentralized autonomous organizations”—aren’t doing a great deal better.
Members of DAOs are clashing with one another about how to balance the need for skilled and experienced managers against the idealistic vision of communal decision-making…. Many DAOs are wrestling with challenges, including huge financial losses from software flaws and hacks, internal divisions that threaten some entities’ continued existence and allegations of improper diversion of community funds. Others have struggled with low turnout among members when it comes to voting on a strategy or business decision, effectively leaving control in the hands of the investors who put up money to help start them.
No matter. The president said something that could be construed as at least somewhat positive about cryptos, and that means it’s time to celebrate.
As details from the executive order leaked overnight, the price of bitcoin, the largest cryptocurrency, rose almost 9%.... “We applaud the White House for recognizing this as a defining moment for U.S. innovation on the world stage,” said Faryar Shirzad, chief policy officer at the largest U.S. crypto exchange, Coinbase Global Inc., in a series of tweets….
“This is as close to an embrace of crypto as you could have hoped for from this Biden administration, if you’re pro-crypto.”
And, of course, the hedge funds are here to benefit.
Firms founded by veterans including Alan Howard, co-founder of Brevan Howard Asset Management LLP, and Paul Tudor Jones, the billionaire who runs Tudor Investment Corp., are expanding their crypto trading, according to people familiar with the situation…. “More funds see crypto as a fifth asset class,” in addition to stocks, bonds, currencies and commodities, says Robert Bogucki, co-head of global trading at Galaxy Digital Holdings Ltd., an early crypto investor. “It’s big enough now.”
Biden Takes Step Toward Regulating Cryptocurrencies [NYT]
Bitcoin Price Surges on Biden’s Crypto Executive Order [WSJ]
Mainstream Hedge Funds Pour Billions of Dollars Into Crypto [WSJ]
Reality Intrudes on a Utopian Crypto Vision [NYT]
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