Autor: dot-traders

The US President Joe Biden has signed an executive order that actively calls for policies on Bitcoin and other cryptocurrencies and urgent action in researching and developing a central bank digital currency (CBDC) in the US. The executive order outlines how the government as a whole shall work in approaching the issue of regulating cryptocurrencies. It calls on all regulatory authorities to collaborate in the regulation and development of digital assets.

The order states:

“My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC. Any future dollar payment system should be designed in a way that is consistent with United States priorities.”

Recap of the executive order

According to the executive order, most regulatory agencies have between 120 days and one year to provide their reports on how Bitcoin and other cryptocurrencies operate within the US economy, how they can be regulated, and how to prevent their illegal use.

The order specifically gives a 210-day deadline on a proposal for CBDC development.

Of utmost importance is honing the illicit use of cryptocurrencies like cases of crypto being used in ransomware attacks and the order seeks to properly regulate digital payment methods and stablecoins.

The order states:

“The international Financial Stability Board (FSB), together with standard-setting bodies, is leading work on issues related to stablecoins, cross‑border funds transfers, and payments, and other international dimensions of digital assets and payments, while FATF [Financial Action Task Force] continues its leadership in setting AML/CFT [Anti-Money Laundering/Combating the Financing of Terrorism] standards for digital assets.”

The order also directs the Treasury Department, the Financial Stability Oversight Council, Federal Trade Commission, the Securities and Exchange Commission, federal banking agencies, the Consumer Financial Protection Bureau, and Commodity Futures Trading Commission to come up with policies for Bitcoin and cryptocurrencies to combat the illicit use of digital assets and protect individuals from “systemic financial risks.”

The order states:

“We must mitigate the illicit finance and national security risks posed by misuse of digital assets.”

The executive order did not leave out the matter of national security and it states that a non-state currency can be used to circumvent sanctions issued against regimes by the United States.

Effect of the executive order on the crypto market

The order has been received well by the majority of crypto enthusiasts and the crypto market which has been rising in anticipation of the order has surged even higher after the order was signed.

Bitcoin for example has surged by over 8% today and currently trades above $42K while Ethereum is up by over 5% and currently trades at $2,701.22. Terra (LUNA) which is leading the current bounce back among altcoins has raised by over 16% and currently trades at $99.67.

The post Biden signs Bitcoin executive order and says CBDC is a matter of “urgency” to the US appeared first on Coin Journal.

I feel like all I’ve written in the last couple weeks has been about Russia invading Ukraine and the impact on the markets. Obviously, it has been quite sombre. But today, there was some good news, albeit a bit trivial on a larger scale. Still, it’s a nice change.

Publicity Stunt?

Kraken announced they are to donate Bitcoin to all Ukrainian accounts registered prior to March 9, 2022. At first, I assumed it was likely a publicity stunt, with the qualification criteria stringent. But upon digging into the details, I have to give Kraken credit – it appears if you have a Ukrainian account, it is quite easy to claim.

• Must be registered from Ukraine prior to March 9th, 2022
• Must be an “Intermediate” or “Pro” account (this means you will have verified with photo ID, so pretty easy)
• Must log in before May 1st , 2022 to claim the Bitcoin

The amount is substantial too. If you held a balance in your account at any stage, you are eligible to claim $1000 (Kraken refers to this as Tranche 1). If you have never held a balance (Tranche 2, as Kraken calls it), you are still eligible for $500 in Bitcoin.

There is actually more, too. A $1000 credit will be applied to accounts for purpose of offsetting currency conversion fees going forward. The aid package will also be increased by the amount of trading fees paid by Russia-based clients in the first half of 2022.

Moral Dilemma

I wrote a piece last week looking into the moral dilemma that crypto exchanges find themselves in regarding the freezing of Russian accounts, following the appeal on Twitter from Ukrainian Vice President Mykhailo Fedorov.

 

Kraken CEO Jesse Powell refused the above request, arguing “Bitcoin is the embodiment of libertarian values, which strongly favour individualism and human rights”. Given crypto’s roots in individual liberty, I have sympathy in that he (and other exchanges) found themselves in quite a tough spot. 

I believe that this initiave – avoiding freezing accounts, but donating the Russian fees collected to Ukrainian accounts, as well as further aid – amounts to a perfect solution to a difficult moral dilemma.

“We hope to continue being able to provide critical financial services in time of need to both our clients in Ukraine and Russia”, Kraken CEO Jesse Powell announced. “Cryptocurrency remains an important humanitarian tool, especially at a time when many around the world can no longer rely on traditional banks and custodians”.

In such a way, Powell has managed to delicately balance both crypto’s fierce defense of liberty, privacy and self-custody with the moral obligtion to come to Ukraine’s help, be that either directly or via levelling sanctions against Russia. 

On-Chain Impacts

Finally, I want to look at quite how much Bitcoin Kraken are giving away. Let’s take the lower band of $500 dollars worth of Bitcoin. At time of writing (Bitcoin trading at $42,300), $500 worth equates to 0.012 bitcoins. Given Bitcoin’s tendency for volatility, let’s round down a bit for conservatism and assume they receive 0.01 bitcoins.

Looking at on-chain data, only 23.6% of Bitcoin addresses actually contain more than 0.01 bitcoins.  That means even the Tranche 2 Ukrainian accounts, who will receive the lower amount of $500, will be in the top quarter of Bitcoin holders. Wow.

Cool move, Kraken.

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