Cryptocurrencies are one example of a digital asset—and most of which are gaining traction in terms of acceptance and use. Blockchain technology, something we have discussed in past articles, is the bedrock in which these currencies can exist and be used. Additionally, it lent itself to being a decentralized currency, meaning it didn’t require oversight from a third party or government organization to be spent or saved securely, safely, and effectively.
However, sometimes the elephant in the room takes up so much space that you are forced to notice it. Cryptocurrency has tens of millions of investors in the United States alone and is valued at over $10 trillion. Regardless of the currency’s initial intent to be decentralized and ruled by the majority of its users, the US government had to face some issues that were beginning to surface. Here are some of the questions they faced:
- Was it safe to use?
- What impact would it have on our economic system and established currency?
- What sort of advantages could be used to our country’s benefit?
- Was this currency being used to fuel illicit activities?
- Is the reported energy consumption connected to mining operations (blockchain) sustainable? Is it a cause for concern?
An Executive Order
The questions raised above are valid concerns. Furthermore, there is also the distinct possibility that cryptocurrency could be a valued element within our economy, but the scope of its potential utility needs to be studied and identified. For anyone who claimed that cryptocurrency wasn’t real, they would be hard-pressed to make the same statement about the Order signed by President Biden that now demands the attention of the Secretary of the Treasury and Department of Commerce.
The Order signifies a shift in policy and outlines the six priorities the U.S. government now has:
- Consumer and investor protection
- Financial stability
- Illicit finance
- Our country’s role inside the global financial system
- Financial inclusion
- Responsible innovation
Rather than lock into any current debate about the Order, it is best to view it appropriately. For instance, it is possible that our country could determine the economic need for a Central Bank Digital Currency (CBDC). Some reports indicate that only 16% of Americans have invested in this form of currency. For those who have reservations about it, you may have more answers in the future. If this is a new form of currency that gets incorporated into our system, the government may have taken the first step toward making it a reality.
As a firm that practices business law, we are following the evolution of cryptocurrency. If our clients use it to drive and sustain a business, we must understand its role in our economic system. Contact us to schedule a consultation regarding your business law issue today.
Latest posts by Quantum Lex (see all)
- Artificial Intelligence In The Legal Community: A Look At Both Sides - October 16, 2023