Bitcoin soared on Wednesday after US President Joe Biden signed an executive order that requires US government agencies to examine the risks and benefits of cryptocurrencies as their popularity rises.
The order comes as officials raised concerns that Russia may be using cryptocurrency to avoid the impact of international sanctions.
Biden’s order will require the Treasury Department, the Commerce Department and other key agencies to prepare reports on ‘the future of money’ with cryptocurrencies in mind.
The US President’s executive order on Wednesday marked the first time since Biden has been in office that a full scale assessment of launching a digital dollar has been explored.
The move as been welcomed by industry players and enthusiasts as it paves way for the potential adoption of cryptocurrencies in the US.
‘We welcome this important initiative to provide clarity on how digital asset markets will be evaluated through inter-agency coordination,’ said Marco Santori, chief legal officer at global crypto exchange, Kraken.
‘We remain concerned that information gaps and misunderstanding of this evolving asset class could lead to unnecessary and damaging policy outcomes that ultimately stifle the benefits that crypto assets can bring,’ he added.
‘While the executive order doesn’t give a direct endorsement to other cryptocurrencies, such as Bitcoin, it does represent a leap forward for the validation of blockchain technology as a whole,’ said Elliot Hill, Communications Director at eSports blockchain platform, Verasity.
‘For those building and innovating within the blockchain industry, it’s a seal of approval from a leading Western economy that blockchain is relevant, secure, and here to stay. That is a powerful development, especially for those companies building blockchain-based enterprise solutions for legacy businesses, many of whom still approach blockchain and crypto with trepidation,’ said Hill.
The White House last year said it was considering an executive order to deal with the growing threat of ransomware and other cyber crime.
The crypto markets performed well yesterday, as Biden’s executive order laid out clear steps for a path towards regulating the industry whilst protecting innovation. Additionally, South Korea elected crypto-friendly Yoon Suk-yeol as president adding to the surge.
However, Bitcoin slumped this morning as Wednesday’s positive day turned into a convictionless rally.
‘Many were expecting Biden’s executive order to include strict regulations that would cause a pullback in the market. However, the order involved reasonable next steps for regulation that aims to protect innovation in the U.S. – as soon as we gained clarity on this, the crypto market rallied,’ said Marcus Sotiriou, an analyst at UK based digital asset broker GlobalBlock.
‘Although we are seeing this move retrace today, I think the long term impact of this order will be very positive for the markets. This is because it brings us one step closer to being a fully regulated asset class, which is what’s required for many institutions to enter the space,’ he said.
The current price of a Bitcoin stands at £29,552.
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