President Biden Assets: Debt Deal Will Not Shield Crypto Traders

In a significant announcement on the last day of the G7 summit, President Joe Biden took a firm stance against the protection of “wealthy tax cheats and crypto traders” while potentially jeopardizing food assistance programs.

“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistants at risk,” declared the President, sparking a critical conversation about economic fairness and digital currency regulation in the midst of a challenging economic climate.

At the time of writing, Bitcoin’s price continues to fluctuate at lower levels following President Biden’s remarks on cryptocurrency.

Biden’s remarks underscore a growing concern about the implications of cryptocurrency usage and the potential for tax evasion by high-income individuals. His comments also shed light on the potential risks to the underprivileged, particularly those dependent on federal assistance programs.

The U.S. government is tasked with forging an agreement by the deadline of June 1st

As the June 1st deadline approaches, the U.S. government faces the pressing challenge of reaching a consensus. With the prospect of a shifting financial landscape on the horizon, the global financial community, inclusive of Bitcoin investors and traders, is preparing for potential market shifts.

The pending debt ceiling decision, coupled with Biden’s recent remarks, underscores the extensive influence of U.S. economic policies on worldwide financial systems, including the burgeoning digital currency markets.


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Biden’s Communications Director Restricted From Handling Crypto Firms

US President Joe Biden’s communications director, Ben LaBolt, will reportedly be restricted from handling matters related to any cryptocurrency or technology firms he previously represented, according to an April 22 Bloomberg Law report. However, he will be allowed to advise on the president’s approach to regulating cryptocurrency and social media companies.

LaBolt was previously a partner at Bully Pulpit Interactive (BPI), a communications firm that had 23 clients paying fees exceeding $5,000 in a year. These clients included decentralized exchange UniSwap, venture capital firm Andressen Horowitz, and companies such as Meta Platforms, Shopify, and West Street.

In a public financial disclosure report published on April 21, LaBolt disclosed owning $50,001-$100,000 in Bitcoin and $15,001-$50,000 in Ethereum 2. However, he will be barred from “participating in legal matters, investigations, or contracts involving cryptocurrency or technology firms he previously represented.”

These restrictions are in line with the ethics rules followed by senior White House staff. Despite the restrictions, LaBolt will be allowed to advise on crypto regulation.

This move comes after Biden signed an executive order (EO) on digital assets on March 9. The EO outlined an interagency process that will involve 16 high officials, initially starting with the task of producing an elaborate series of reports. These reports are due at intervals ranging from 90 days to over a year from the publication of the EO.

While the EO did not specify any regulatory actions, it attracted attention from government officials and industry leaders alike. Republican “Crypto Senator” Cynthia Loomis of Wyoming praised the administration’s growing interest in digital assets.

Ari Redborn, head of legal and government affairs for blockchain-based intelligence firm TRM Labs, said that he was “expecting certain things and the positive tone was not necessarily one of them.”

The move to restrict LaBolt’s handling of matters related to crypto firms may be seen as a way to ensure ethical behavior in the White House. This move is in line with the Biden administration’s focus on transparency and ethical governance.

It is worth noting that this move may also affect LaBolt’s former clients, such as UniSwap and Andressen Horowitz. It remains to be seen how this move will affect their business dealings with the White House.

Overall, this move highlights the growing interest in crypto regulation by the Biden administration. With the interagency process set in motion by the EO, it is likely that the US government will take a more active role in regulating the crypto industry.


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Biden Administration Sees Crypto Regulation as a Matter of National Security

Key Takeaways

  • The Biden administration is set to order government agencies to propose crypto regulations within weeks.
  • The order is intended to develop a regulatory framework as a matter of national security.
  • The memorandum will task bodies to keep innovation in mind while still tackling issues like illicit activity.

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President Joe Biden’s administration has plans to task various federal agencies with regulating crypto assets as a matter of national security. The executive order is expected within weeks. 

Biden to Task Agencies with Proposing Crypto Regulations

Cryptocurrency regulation is an important component of national security, according to the Biden administration. 

Per a Barron’s source, the White House will order government bodies to conduct analyses on digital assets including cryptocurrencies, stablecoins, and non-fungible tokens for the purpose of creating a regulatory framework. According to the source, the administration’s goal is to take a holistic look at crypto assets in order to “develop a set of policies that give coherency to what the government is trying to do in this space.” 

The White House, nevertheless, has no plans to issue recommendations of its own but rather would require government agencies to put forth their own proposals, for which the White House would synthesize and bring together. 

The Barron’s source emphasized the administration’s desire for the “harmonizing” of regulations, particularly globally and between nations since “digital assets don’t stay in one country.” 

Many parts of the government are set to be involved, including the State Department, Treasury Department, Council of Economic Advisers, National Economic Council, and the White House National Security Council. 

The current lack of consensus on varying issues (e.g. what constitutes a security) is something the Biden administration seeks to address. 

Per Bloomberg last week, though, the administration’s focus is not only on issues like digital currencies being used for illegal activities or the overall, but rather on the systemic impacts crypto assets might have. In fact, the White House also seems keen on allowing the U.S. to be at the forefront of the growing space’s innovation. 

Regulators in the U.S. have already been interacting with the digital asset subject recently. Congress had colorful hearings on stablecoin regulation last month, as well as hearings on the environmental impact of cryptocurrencies only last week. Meanwhile, The Federal Reserve finally released its long-awaited central bank digital currency report on Jan. 20. Other nations, though, are taking different approaches, with the Bank of Russia flirting with a crypto ban and top EU regulators urging a Proof-of-Work mining ban. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.

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Biden Administration Preparing To Release Government-Wide Strategy for Dealing With Digital Assets: Report

The Biden administration is reportedly expected to take sweeping action on the digital asset space in the weeks ahead.

According to a new Bloomberg report, a number of unnamed insiders reveal that senior administration officials plan to unveil an executive order that will provide details on the regulatory, economic and national security risks posed by digital assets.

The executive order will also task various government agencies to submit reports in the latter half of the year.

The Financial Stability Oversight Council is one group expected to offer insights in the coming months, with the possibility of the State Department and the Commerce Department being consulted as well.

The White House is also likely to discuss the possibility of supporting a central bank digital currency (CBDC), which would be a digital asset backed by the US government.

Just last week, the Federal Reserve released a long-anticipated report on the feasibility of issuing a CBDC in the United States.

The Fed report says,

“A CBDC could potentially serve as a new foundation for the payment system and a bridge between different payment services, both legacy and new.

It could also maintain the centrality of safe and trusted central bank money in a rapidly digitizing economy.”

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Why Hillary Clinton Warns Biden Administration To Regulate Crypto Market

During an MSNBC interview, Hillary Clinton continued to suggest hypothetical scenarios in which cryptocurrencies could destabilize the United States and called on the Biden administration to regulate them as she fears that state and nonstate actors manipulate the role of the U.S. dollar.

Related Reading | Inverse Signals: Why Bitcoin Weakness Is Attributed To Dollar Strength

Clinton warned people are only beginning to see the need to regulate the cryptocurrency markets and called to imagine “the combination of social media, the algorithms that drive social media, the amassing of even larger sums of money through the control of certain cryptocurrency chains,”

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The former presidential candidate has already voiced her unamicable views around cryptocurrencies before, seeing them as a threat for the United States.

Likewise, for Clinton, the nations of China and Russia are manipulative obstacles for the country.

We are looking at not only states, such as China or Russia or others, manipulating technology of all kinds to their advantage, we are looking at nonstate actors, either in concert with states or on their own, destabilizing countries, destabilizing the dollar as the reserve currency.

Clinton thinks that the Biden administration needs to address many questions regarding the role of cryptocurrencies in the U.S. nation and its economy, but added they might not have much time to do so.

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The Former Secretary of State hopes that the current administration will try to operate “exactly” in the way she thinks best based on what she has been “hearing from them”, meaning their views regulations match her hostility.

We certainly need new rules for the information age, because our current laws, our framework, it is just not adequate for what we are facing.

Is The U.S. Marching Towards More Crypto Hostility?

Last week, the Former Secretary of State made a similar warning during the Bloomberg New Economy Conference, where she stated that crypto represents a risk for the stability of the U.S. nation and currency (the U.S. dollar).

Clinton believes the “interesting and somewhat exotic effort” of crypto mining can undermine the role of the dollar and seemed to consider full-ban on cryptocurrencies similar to China’s:

It appears as though China is going to prevent outside technology payment systems, like the cryptocurrencies development, from playing a big role inside China. I think they recognize, giving their nationalism, perhaps earlier than other nations, that this could be a direct threat to sovereignty.

On the other side, Senator Pat Toomey had voiced back in September that the China ban was an advantage for the United States and tweeted his own opinion on the upside of innovation and economic liberty, which Hillary Clinton still fails to approach.

Beijing is so hostile to economic freedom they cannot even tolerate their people participating in what is arguably the most exciting innovation in finance in decades. Economic liberty leads to faster growth, and ultimately, a higher standard of living for all.

Furthermore, Jerome Powell has just been renominated as U.S. Federal Reserve Chair to face the accelerating inflation and other challenges the nation’s economy is facing. Powell has been warry around cryptocurrencies, but he has also stated he would not opt for a ban, but regulatory controls on stablecoins.

Related Reading | Bitcoin Heads Towards $35,000 as Biden Stimulus Hurts US Dollar

Crypto total market cap at $2.5 trillion in the daily chart | Source:


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USDC issuer Circle supports proposal to regulate stablecoin issuers as banks

Issuers of stablecoins like Tether (USDT) and USD Coin (USDC) may soon be required to work under the same regulations as banks, but that seemingly doesn’t frighten the CEO of the USDC-issuer Circle.

Commenting on the Biden administration’s proposal to work on a bank-like regulation for stablecoin issuers, Circle CEO Jeremy Allaire took a supportive stance for the recommendation. He highlighted that proposal’s aim to regulate dollar stablecoin issuers in the United States financial system as banks at the federal level by the Federal Reserve represents significant progress for the industry’s growth.

Allaire noted the current steps would upgrade the current money transmission-focused regulations “to a much more fundamental infrastructure at the core of what potentially the future of banking and capital markets look like.”

“There’s a real recognition that as these payment stablecoins grow, they could grow at internet scale relatively quickly,” Allaire commented. When the stablecoin market grows into the hundreds of billions in circulation and trillions in transactions, the risks to financial markets and financial stability become much more significant, he added.

Related: Acting CoC Hsu: More crypto regulation is needed

As Cointelegraph reported, the Biden administration’s proposal aims to create a new “special-purpose charter” for stablecoin issuers, putting them in the same category as banks. Allaire believes that the details on a bank charter for a crypto company might need to get worked out over time with both the FDIC and other agencies that oversee banks.

Stablecoins have become a central talking point for regulators. In September, the U.S. Treasury reportedly conducted several meetings to examine the risks of stablecoins for users, markets or the financial system.