Crypto regulations are coming and they are coming like Miley Cyrus riding a wrecking ball. The Biden administration is gearing up toward a massive wave of regulations. In fact, crypto regulations are now urged to be treated as a matter of national security. Needless to say, this is the same administration that printed massive amounts of money and caused the hyperinflation. Apparently, there is an executive plan to release soon with tasks for federal agencies regarding cryptocurrencies. For the most part, crypto regulations have been pretty light considering the stock market regulations. In the stock market, you could get crucified for pumping the market like Elon is doing DOGE on Twitter. Unfortunately, regulations are not good news for a market of cryptographic and anonymous transactions. Stay with us as we go over the details of the executive plan.
Crypto Regulations on the Horizon
Initially, an unknown source familiar with the plan told Barron’s about the upcoming plan of action. Primarily, regulating cryptocurrencies such as Bitcoin and Ethereum are now a matter of national security. Interestingly, Russia is taking a similar approach. As part of the national security memorandum which is to release in a few weeks, multiple government agencies must analyze digital assets and provide a framework. This includes cryptocurrencies, stablecoins, NFTs. Long and short of it, the plan is to task related agencies with analyzing, research and a proposal for the legal framework. Finally, the White House will make the subsequent decision and reach a consensus.
“This is designed to look holistically at digital assets and develop a set of policies that give coherency to what the government is trying to do in this space,” said the source.
The State Department, Treasury Department, National Economic Council and Council of Economic Advisers are contributing to the executive plan. However, The White House National Security Council is also investigating crypto regulations. So far, United States has remained very tolerant of cryptocurrencies but this news comes as a strong signal toward the crypto market.
“Because digital assets don’t stay in one country, it’s necessary to work with other countries on synchronization.”
Crypto Regulations Are That Serious?
Undoubtedly, at least for the United States, a national security matter is of utmost urgency and significance. In that regard, it is hard to maintain an optimistic view. On the other hand, it could also be a blessing in disguise. At this point, there are too many agencies with jurisdiction on the crypto market.
“Various agencies oversee the industry, including the Securities and Exchange Commission and the Commodity Futures Trading Commission. But there’s no consensus on matters such as whether some tokens should be registered as securities, or how to oversee exchanges, stablecoins, and high-yield lending products.“
US Legislators Oppose
As of March 19th, more than half a dozen United States congressmen are objecting this decision. Primarily, they are against the severe regulatory pressure for the harm it could impose on developers.
With a letter sent to US Securities and Exchange Commission (SEC) head Gary Gensler, Tom Emmer from Minnesota leads this bipartisan group. In essence, the legislators are saying that the over-extensive information requirements are a risk for stifling domestic technological innovation in this sector.
“Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements.
The SEC must ensure that its information-seeking requests to private crypto and blockchain firms are not overburdensome, unnecessary, and do not stifle innovation.”
SEC’s Gary Gensler has clearly took a stand against cryptocurrencies calling them wild west. However, the Minnesota congressman pointed out in a Tweet that the SEC must honor a 1980 law that protects americans from overwhelming documentation requirements.
Not quite yet! The executive plan will provide the agencies between three to six months to study the matter and work on a cohesive regulation framework. Realistically, the plan would take at least three quarters to have any meaningful impact. Despite the national security level of importance, navy seals cannot take Bitcoin down.
Frankly, the US has been acting strange about cryptocurrencies and crypto regulations. In a perfect world, regulations would be imposed on a market with the same rate of growth in market cap. In this case, it seems that the country has not been taking crypto seriously and all of a sudden they feel threatened. This lack of attention and possible negligence can seriously harm the investors since it could create a sudden bearish shock wave. Anyhow, at least the US will not ban crypto overnight like China or Russia did right? Right?
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