President Biden will soon announce an executive order directing government agencies to study strategies for the regulation of cryptocurrency. Digital money currently has the advantage of being a mostly-untaxed haven for money laundering and tax evasion. There is also no shortage of crypto scammers looking to take advantage of their next mark. News of potential upcoming regulation has spooked the markets substantially.
The FBI is also forming a new crypto unit. The President’s Working Group on Financial Markets has already begun work to look into the risks of crypto. As news spreads of the government wanting to intervene in the crypto market, several major coins took nosedives. Yahoo! Finance reported on Biden’s plan.
“President Biden is expected to issue an executive order next week directing agencies across the government to study cryptocurrencies and a central bank digital currency (CBDC) and come up with a government-wide strategy to regulate digital assets.
According to an administration official familiar with the matter, the forthcoming directive will commission a study of a CBDC and ask a range of agencies – including the Departments of Treasury, State, Justice and Homeland Security – to develop a report on the future of money and payment systems. Meanwhile, the Director of the Office of Science and Tech policy will do a technical evaluation of what might be needed to support a CBDC system.”
Ethereum was down 7% in the wake of the announcement. Bitcoin plummeted as well. More speculative coins like Dogecoin, which was designed as a joke and specifically built to lose value, caught on with novice investors after what appeared to be a pump-and-dump by influencers such as Elon Musk. Those markets have fallen off drastically, as well.
Advocates for the adoption of cryptocurrency argue that the entire idea is to keep government regulation out of financial markets. Once they get involved, the entire purpose gets defeated. Those fears have manifested in the form of plunging crypto prices this afternoon.
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