Following president Biden’s signing of the recent crypto executive order, government agencies will finally be forced to get their heads around understanding exactly what cryptocurrencies are, and how they fit into the financial system, in order to be able to regulate them appropriately.
For too long, leading luminaries from the banking sector, from government, and even from the regulatory agencies, have cast aspersions on cryptocurrencies, some of them with just about zero knowledge of understanding of even the basics.
From their high vantage points it has been very easy for those in power to just follow the mainstream media narrative of crypto bad, because it is used mainly for money laundering and terrorist financing etc. Even Janet Yellen, the secretary of the Treasury, and former Fed chairwoman, would have been expected to at least know something – but her public statements on crypto have so far shown a total lack of understanding of the technology.
Back in the 1990s a very similar situation existed, when government agencies were faced with the birth of the internet, and didn’t appear to have a clue how to deal with it.
To its credit, the Whitehouse has ordered a whole government agency approach to the issue, and various agencies have been tasked with delving into different issues, and with coming up with solutions over the next few months, and the opportunities, as well as the risks, are to be considered.
Some thorny issues will need to be resolved, such as the question of Stablecoins, decentralised finance, and the potential of a US central bank digital currency, that will also be thrown into the mix.
There does now appear to be a will in Congress for there to be more understanding of cryptocurrencies, and this was borne out by the house financial services hearing on crypto, that took place late last year.
Now the task of getting educated on crypto technologies has passed to the financial agencies that really do need to smarten up, get wise, and get their heads around a technology that, should the US embrace, can have economic implications that are almost impossible to imagine now.
The days of ignorantly criticising such disruptive technologies are now over. The US government has a huge task on its hands. We are at the juncture of the biggest shake-up in the monetary system, arguably in history.
If all those tasked with doing their homework on crypto are able to do so, then at least the US cannot be blamed for making huge decisions from a position of ignorance. Whether it will be the right decision, will depend on just how much influence those with axes to grind from the traditional financial system will have on the higher echelons of power.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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