Crypto Industry Could Benefit From Biden’s Executive Order, Regulations Provide Legitimacy – President Joe Biden’s executive order on cryptocurrency regulation, according to a Cornell University economics professor, could boost the industry. “Credibility is what these kinds of restrictions bring to the industry.” the professor explained.
In an interview with CNBC released Thursday, Eswar Prasad, a professor of economics at Cornell University, discussed President Joe Biden’s crypto executive order and what it means for the industry.
At Cornell University’s Charles H. Dyson School of Applied Economics and Management, Prasad is the Nandlal P. Tolani senior professor of trade policy and professor of economics. He formerly worked at the International Monetary Fund (IMF) as the head of the China division and the chief of the financial studies division in the research department.
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The Cornell professor has warned about the dangers of bitcoin to monetary and financial stability on numerous occasions. He predicted that Bitcoin will not live much longer in December of last year.
President Biden signed an executive order on cryptocurrency regulation on Wednesday. The executive order, according to the professor, “directs several United States agencies and organizations” to develop a “comprehensive plan for the regulation of a broad collection of digital assets, including decentralized cryptocurrencies such as bitcoin, as well as stablecoins.” It also looks at the possibility of launching a digital version of the United States dollar.
The professor continued :
“Regulation is absolutely important in all of these areas, as it is currently a bit of a Wild West. You have a lot of opportunities for decentralization, as well as the potential for these new technologies to democratize finance.”
“On the other hand, Prasad said there is a risk that these technologies will be utilized for illicit financing.” They could end up failing to provide the level of investor protection required to ensure that ordinary investors are aware of the dangers they are taking on.”
“You also have financial stability risk,” the professor noted, “particularly from stablecoins, which look to be the safest of products but are increasingly acting like unregulated money market mutual funds.”
The Cornell professor explained that “the idea behind the executive order is to start thinking about the functionality of these different assets and technologies and thus regulate them.”
Actually, it could be beneficial to the industry, because at the end of the day, what these kinds of restrictions give the sector is credibility.
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Although the crypto sector may not like some aspects of the regulation when it is finalized, Prasad believes it will be beneficial to the industry overall.
Nonetheless, he came to the following conclusion:
Overall, adding some regulatory certainty to the sector would undoubtedly benefit the industry, and it may also help harness the benefits of these new technology by reducing risks.
Biden’s crypto executive order has boosted the confidence of many in the crypto community. A crypto industry executive called it as “an indication that crypto is here to stay.”