Remember the joke line, “We are from the government and we are here to help you?” The recent news from the White House is an indication of more regulation, disclosures, reporting to tax agencies, and taxes are ahead for cryptocurrency users.
President Joe Biden announced a new approach to oversight of cryptocurrencies to support innovation and protect consumers. The White House has unveiled a new executive order for the nation's plan to establish a framework to both develop opportunities and mitigate the risks of cryptocurrencies. Introduced as the "first-ever, whole-of-government" approach to cryptocurrencies, Biden's highly anticipated executive order on "responsible development of digital assets" encourages federal agencies to coordinate efforts to study what policies and tools the US could use to combat the risks of cryptocurrency while keeping the US at the forefront of technology and the global financial system. "The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate," a White House spokesman said.
Recent surveys suggest that around 16 percent of adult Americans approximately 40 million people have invested in, traded, or used cryptocurrencies, while over 100 countries are exploring or piloting Central Bank Digital Currencies. "And, it must play a leading role in international engagement and the global governance of digital assets consistent with democratic values and US global competitiveness,” per the report
The order directs the Treasury Department and other agencies to "develop policy recommendations" to address the implications of a growing cryptocurrency sector and changes in financial markets for consumers, investors, and businesses. It also encourages regulators to explore what safeguards they have for system financial risks posed by digital assets. "President Biden's historic executive order calls for a coordinated and comprehensive approach to digital asset policy," said US Secretary of the Treasury Janet L. Yellen.
The Treasury Department has been tasked with producing a report on "the future of money and payment systems" that includes what it means for economic growth, financial growth and inclusion, and national security. Reuters reported the Treasury's 'future of money report would be due in 180 days, which could influence policy on releasing a US CBDC.
The order states it seeks to "place urgency" on the research and development of a US CBDC and asks the Federal Reserve to continue its current research into the pros and cons of a CBDC. It also directs the Department of Commerce to work with agencies to drive the US competitiveness in digital asset technologies. It also directs all relevant federal agencies to focus on coordinated action to combat illicit finance and national security risks from the illicit use of digital assets.[1]
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[1] https://www.zdnet.com/finance/blockchain/president-bidens-executive-order-on-crypto-heres-what-it-covers/
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