U.S. in Major Push for CBDC, Global Digital Asset Leadership Since China’s Pushback
With China now out of the way, the U.S. has made its first major move to stamp its global leadership role regarding digital assets and central bank digital currencies (CBDCs). Though ambiguous but not antagonistic, the White House, in a fact sheet released on Wednesday, March 9, outlined the government’s financial stability strategy including a plan to reinforce the U.S. position in the global financial system by establishing a framework to drive competitiveness and leveraging of digital asset technologies.
The day saw President Joe Biden sign an Executive Order to present “the first-ever, whole-of-government approach” to address attendant issues related to digital assets and their underlying technology, the fact sheet states, pointing out the policy’s key six digital assets priorities. They include consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation.
It also seeks to place “urgency on research and development of a potential United States CBDC” should the country deem issuance to be in its national interest, according to the statement.
Pushing China even behind
China has been the de facto leading nation for digital assets until 2021. The vast majority of crypto-related activities including mining, Bitcoin network hash power contribution, trading and equipment manufacturing were reportedly held in the giant Asian nation. This understanding builds on, among other things, the Chinese government made known its plan to explore opportunities from and promote the use of blockchain in various facets of its national life and even became the first major economy to spearhead the issuance of a digital version of its currency as a CBDC which has been piloted across many Chinese cities in the past two years.
However, the momentum seems to have slowed down between May and September 2021 when the Chinese government took a new turn to ban all crypto mining and transactions within its borders leaving many players in the industry to find a new home for their operations. Some of them, particularly in the mining sector, moved to the U.S. where they consider having a stable regulatory environment despite higher running costs.
Biden’s US executive order on crypto and Lagarde calling for MiCA being passed are strong signs of a bright future for crypto in both the US and the EU.
— Anders L 🏁 (@X__Anderson) March 10, 2022
Mixed feelings follow Order
Willing to “support responsible innovation”, the latest U.S. move is pushing for international frameworks, capabilities, and partnerships to mitigate the risks surrounding the illegal use of digital assets as well as develop a framework that will serve as a foundation for U.S. agencies to drive the country’s competitiveness and leadership with regards to digital asset technologies. The move has been welcomed in various quarters including from Jeremy Allaire, the co-founder & CEO of Circle who points out that the U.S. seems to be taking on the reality that digital assets represent one of the most significant technologies and infrastructures for the 21st century.
For those of us in the crypto community, IMHO this E.O. should be viewed as the single biggest opportunity to engage with policy makers on the issues that matters. The proverbial doors of policymakers are WIDE OPEN, this is now a NATIONAL conversation in the U.S. (7/7)
— Jeremy Allaire (@jerallaire) March 9, 2022
“We are at a turning point in geopolitical and geo-economic systems and history, and the U.S. now has the opportunity to lean into an open, internet-native economic infrastructure while others focus on closed, tightly-controlled and privacy-eroding alternatives,” says Allaire in a series of tweets.
On the other hand, there are contrary views on why the Order may not be for good. An author, Matthew Loop, hinted at the Order leaning towards socialism and exerting control. The view is shared by another author, Robert Kiyosaki.
BYE-BYE BITCOIN: Prediction. Biden to sign EXECUTIVE ORDER regulating Cryptos. NEXT: Fed Crypto. NEXT: all crypto currencies seized & folded into GOVERNMENT crypto. “Let’s Go Brandon” you criminal. You commie.
— therealkiyosaki (@theRealKiyosaki) March 8, 2022