Amid growing concerns that the fast-growing industry is a haven for criminals and poses risks to financial stability, the US is working to draft new rules for cryptocurrencies.
The White House said its goal is to protect consumers while maintaining America’s technological leadership.
The executive order comes as investments in digital assets like bitcoin have exploded, from an estimated $14 billion to more than $3 trillion in five years.
Some anxiety regulations have not kept pace.
More than 100 countries, including China, are investigating or testing the use of digital currencies by central banks, both for domestic use and in cross-border transactions. White House officials said this has “impacts on the centrality of the US dollar in the global financial system.”
Although various parts of the US government, including the central bank, have investigated the issue, little action has been taken.
An executive order signed by President Joe Biden on Wednesday requires officials to develop proposals within 180 days.
“This is a way to organize ourselves urgently so that we have a coherent and coordinated view of digital assets,” administration officials said in a briefing with reporters.
Officials said they wanted stronger safeguards and controls against money laundering, among other things.
The U.S. Treasury Department has also signaled that it wants increased oversight over companies offering digital currencies that advertise themselves as being backed by the dollar.
Polls suggest that one in 16 Americans has invested in cryptocurrency — about 40 million people — including many in minority communities that have historically had less access to banks.
The issue has also gained urgency amid the Ukraine war, with politicians raising concerns that cryptocurrency could be used to circumvent financial sanctions against Russia.
Many in the industry have been pushing for the government to clarify what kind of rules and regulations could be coming.
Bitcoin surged more than 8% on Wednesday.
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