Once considered obscure and something on the financial “fringes,” cryptocurrency has grown in prominence. The controversial monetary system has its supporters and detractors.
Prominence has a price. U.S. President Joe Biden issued an executive order for government officials to analyze the risks versus the benefits of the dollar’s digital version. Federal agencies will now form a united front in considering regulation and oversight of cryptocurrency.
Six key areas will be examined and include:
Following the announcement, cryptocurrency enthusiasts are expressing concern, particularly over the possibility of regulatory oversight for digital assets. A since-deleted tweet from the Treasury Department used the term “historic” that sounded alarm bells.
Consumer protection is a priority. Crypto scams directed at investors have resulted in significant financial losses due to cyberattacks on both users and exchanges.
Stablecoins that are digital tokens connected to the value of the U.S. dollar and other existing currencies are in an unwelcome spotlight. Tether dominates that type of digital currency. However, sufficient baking by dollars held in reserve is uncertain, despite the digital asset company’s claim.
Biden’s order also requests federal agents to minimize illicit activity and potential security risks involving cryptocurrencies. All of this occurred in the shadow of U.S. officials seizing an unprecedented $3.7 billion in bitcoin from a hack that occurred in 2016.
Crypto supporters cite significant challenges for laundering funds through digital currency as all transactions are public on the blockchain.
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