Biden Orders Study of Crypto Risks

US President Joe Biden signed an executive order Wednesday establishing the first-ever federal strategy on cryptocurrencies, the White House said.

Citing the fact that 16% of all Americans have invested in cryptos, the study will investigate six priorities: consumer and investor protection; financial stability; illicit finance; US leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. The executive order also calls on the federal government to explore a US Central Bank Digital Currency.

One of the outcomes of the study will be to encourage innovation while mitigating risks to consumers, investors and businesses, broader financial stability and the environment. Crucially, the policy recommendations will lead to the closing of regulatory gaps. There is also a call for coordination across federal agencies to mitigate illicit finance and national security risks. The result is expected to be a framework that drives US competitiveness and leadership on cryptocurrencies, with an emphasis on responsible development, design and implementation of crypto systems.

What does this mean for me? 

For the crypto trader, this is undoubtedly good news. Many analysts have maintained for years that crypto will inevitably enter the mainstream, despite reservations from established players like banks. While the executive order may lead to increased regulation of cryptos, it could be just the endorsement that cryptos need to get to the next level.

You should watch your crypto portfolio for a short-term bump from this news. You can also expect cryptocurrencies to become known after the findings of the study become public.