Perhaps one of the most-followed events of recent times came to an end recently, with the 2020 US presidential election being called in favour of former vice-president Joe Biden, which will mean that Donald Trump will remain a one-term president for now. This result has brought a lot of relief and happiness to many millions in the USA as well as all over the world, but it will be interesting to see what sort of policy positions the new administration takes as well. Among those, there are signs that the new government could be beneficial for cryptocurrencies and related industries.
That will be completely at odds with how the Trump administration dealt with crypto. The president himself had declared that he was “not a fan” of crypto, while some of his cabinet picks, such as Treasury Secretary Steve Mnuchin, were also quite opposed to the idea. However, most industry experts see the Biden administration as a breath of fresh air in that regard, as they believe that it will be willing to draft comprehensive and fair regulations to bring the sector into line while at the same time allowing it to thrive.
The correct and competent regulation of cryptocurrencies is growing more and more important as they become popular and begin to be used more frequently. Crypto has already started having a lot of traction online, with various online merchants accepting cryptocurrencies as a method of payment. Online casinos and gambling websites are at the forefront of this, with many of them offering their customers the chance to play btc roulette and other such options where they can place wagers using crypto. Thus, effective regulation is the need of the hour, both to ensure a stable set of rules as well as provide people with grievance redressal options.
The Biden administration’s potential attitude towards this is encouraging. The president-elect has chosen Gary Gensler as a part of his transition team, which has been taken as a sign that he is more open to crypto than his predecessor. Gensler is an ex-Goldman Sachs banker, who teaches courses on blockchain and digital currencies at the MIT Sloan School of Business. This is encouraging since it will be important to have someone with an understanding of how crypto works on the administration, which will be very different from the usual members of Congress, who have little idea of this phenomenon, but will be required to vote on laws and proposals.
As an example of this, there has been a bill introduced in the US Congress recently which would require any private stablecoin issuers to obtain regulatory approval and bank charters before putting them into circulation. There are also noises around the Federal Reserve potentially launching its own digital currency, which would almost certainly serve to crowd out any privately-issued currencies and coins.
Of course, there is no consensus as of now on what the new administration’s position on all of this will be, but it is the private sector that has taken the lead in terms of issuing digital currencies so far, so it may not be the best idea for central banks to get involved. Additionally, one of the biggest attractions of using cryptocurrencies is that they are decentralized and not controlled by central banks or governments, which would not be the case for a central bank-issued currency. The hope is that the new administration looks at this area as a constructive way to grow the American economy, rather than seeing it as a threat to the established order.