Why have cryptocurrencies skyrocketed again?

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United States President Joe Biden has signed the long-awaited executive order on cryptocurrencies whereby federal agencies will assess their focus on six “key priorities” within the digital asset sector. This has led to an increase in investor optimism, with Bitcoin once again exceeding $42,000 (38,300 euros).

Before its officialization, a communication from Janet L. Yellen, Secretary of the Treasury, began to raise optimism among investors, with Bitcoin, Ethereum and many other cryptocurrencies returning to the green and to highs not seen for weeks.

A statement published ahead of time

In a communication scheduled for publication on Wednesday, March 9, but accidentally leaked on Tuesday night, US Treasury Secretary Janet Yellen revealed that President Joe Biden’s impending executive order on cryptocurrencies would adopt a constructive approach to regulating the digital asset industry.

“A presidential executive order on cryptocurrencies would ‘support responsible innovation,’ as it coordinates US policy across agencies. Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems,” Yellen said.

Bitcoin price March 9

Bitcoin price in the last 24 hours (Source: Coinmarketcap)

This began to trigger the movements of investors, aware of the imminence of the signing of this executive order. For example, the price of Bitcoin, the reference cryptocurrency, began to skyrocket and exceed the barrier of 42,000 dollars (38,300 euros) after a rather turbulent start to the year and a collapse after the beginning of the war between Russia and Ukraine. . Other prominent cryptocurrencies like ETH, SOL, LUNA followed suit and rose in price as well.

“According to the comments [de Yellen], the cryptocurrency executive order is positive and calls for a coordinated and comprehensive approach to digital asset policy that will support responsible innovation. I applaud this constructive approach to thoughtful crypto regulation and look forward to working together with various stakeholders to ensure the United States remains a leader in crypto,” Cameron Winklevoss, co-founder of Gemini Trust, tweeted.

Joe Biden’s digital dollar

Finally, it is available again the press release deleted for being published before time. Wednesday’s executive order, originally reported to be in the works in October 2021, will define six “key priorities” for the administration: protect US interests, protect global financial stability, prevent illicit use, promote ” responsible innovation”, financial inclusion and maintaining American leadership.

One part of the executive order will task the Treasury Department with creating a report on the “future of money,” including how the current financial system might not meet the needs of consumers. In this sense, the possibility even of the creation of the digital dollar opens up.

digital dollar

Dollars and cryptocurrencies, increasingly closer

The penetration of cryptocurrencies in the United States has been a more than acceptable percentage to consider this movement, since, according to reports, approximately 40 million Americans, or 16% of the total population of the country, have invested or are trading with cryptocurrencies. The executive order reflects that a central bank digital currency could be issued, “if the issuance is deemed to be in the national interest.”

Biden’s executive order will ask the Federal Reserve, as well as other relevant agencies or departments within the federal government, to look at the potential risks of a CBDC (Central Bank Digital Currency) in addition to the potential benefits. Implications for national security, human rights, and financial inclusion are other factors these agencies will need to consider in answering the question of whether issuing digital fiat money is in the national interest.

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