Bitcoin and other cryptocurrencies are surging after the reports that there are chances that President Joe Biden will sign an executive order to govern how cryptocurrency is traded amid concerns that Russia may use it to avoid the effect of devastating economic sanctions. According to a senior government official, the Biden administration sees the growing popularity of cryptocurrency as a need to act quickly to examine the risks and benefits of digital assets.
As of 6:30 a.m. ET, Bitcoin was trading at $42,118.73, up around 8% from the previous day. Other cryptocurrencies, such as ether, also rose sharply. However, the initial price increase occurred before the executive order's announcement. The surge began shortly after 6 p.m. ET on Tuesday, when the Treasury Department released details and a statement in reaction to President's forthcoming executive order on cryptocurrencies.
The Treasury Department, the Commerce Department, and other important departments will be required by Biden's directive to submit reports on "the future of money" and the role that cryptocurrencies will play. Officials say that broad regulation of the cryptocurrency market, which surpassed $3 trillion in November, is necessary to safeguard US national security, financial stability, and competitiveness, as well as to combat the increasing threat of cybercrime.
Furthermore, National Economic Council Director Brian Deese and National Security Advisor Jake Sullivan believed that the approach clearly explained the will to strengthen US leadership in the global financial system and ensure the long-term efficacy of vital national security tools like restrictions and anti-money laundering frameworks.
Additionally, according to one official, one significant goal of the regulation is to address bottlenecks in the present U.S. payments system and increase financial inclusion, particularly among the poor, who make up around 5% of the population but do not have bank accounts due to high fees.
Moreover, the order will also investigate the idea of a new central bank digital currency. In January, the Federal Reserve published a report on the subject that examines the risks and advantages of digital money backed by the United States. The order implies that cryptocurrencies will continue to be a part of the US economy for many years to come. Bloomberg News was the first to report on the White House's plans to go forward with the executive order.