President Joe Biden on Wednesday signed an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should jump in and create its own digital currency.

The Biden administration views the explosive popularity of cryptocurrency as an opportunity to examine the risks and benefits of digital assets, said a senior administration official who previewed the order Tuesday on the condition of anonymity, terms set by the White House.

Under the executive order, Biden also has directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security.

Biden’s order will require the Treasury Department, the Commerce Department, and other key agencies to prepare reports on “the future of money” and the role cryptocurrencies will play.

Wide-ranging oversight of the cryptocurrency market, which surged past $3 trillion in November, is essential to ensure U.S. national security, financial stability, and U.S. competitiveness, and stave off the growing threat of cybercrime, administration officials said.

Analysts view the long-awaited executive order as a stark acknowledgment of the growing importance of cryptocurrencies and their potential consequences for the U.S. and global financial systems.

The finance industry, crypto traders, speculators, and lawmakers, who have compared the cryptocurrency market to the Wild West, we’re all looking forward to the executive order, which was originally reported to be in the works in October 2021.

Around 16% of adult Americans — or 40 million people — have invested in cryptocurrencies, according to the government, and 43% of men between the age of 18 and 29 have invested in digital currency.

Wide-ranging oversight of the cryptocurrency market, which surged past $3 trillion in November, is essential to ensure U.S. national security, financial stability, and U.S. competitiveness, and stave off the growing threat of cybercrime, officials said.

Analysts view the long-awaited executive order, first reported on Monday, as a stark acknowledgment of the growing importance of cryptocurrencies and their potential consequences for the U.S. and global financial systems.

One of its key measures directs the U.S. Government to assess the technological infrastructure needed for a potential U.S. Central Bank Digital Currency (CBDC) — an electronic version of dollar bills in your pocket.

In January, the U.S. Federal Reserve kicked the question of whether the United States should pursue a digital dollar to Congress, leading analysts to predict such a project would take years. 

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