One opening question for the new Biden Administration is how they might deal with cryptocurrencies. It’s not going to be an issue that is central to the administration directly, yet with the emergence of the digital yuan from geopolitical competitor China, and inflationary monetary policy meant to gear a recovery in employment rates, the questions on the economy, great power competition and digital rights around the world, central themes of bitcoin, will be immediate priorities.
A Biden Administration will have to weigh its policy tools and speeches carefully in an age of emerging “great power” conflict, protest movements around the world, and the economic stagnation that has come from the COVID-19 pandemic. The theme of bitcoin and cryptocurrencies is not just one of direct regulations and laws, but rather its outsize effect on international geopolitics, finance and political relations.
This article isn’t meant to be legal advice of any sort, but rather a walkthrough of the different issues, laws, and regulations an incoming Biden Administration may face with bitcoin and other cryptocurrencies.
The current state of bitcoin and federal policies
Currently, bitcoin is “directly” regulated at the federal level by the Office of the Comptroller of the Currency (OCC) with regards to its custody, and the US Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act (CEA).
Exchanges of cryptocurrencies and bitcoin may be subject to the Bank Secrecy Act and its registration/disclosure requirements. Cryptocurrencies and bitcoin are not insured by the Federal Deposit Insurance Corporation (FDIC).
Jay Clayton, the former chairman of the SEC affirmed that he determined that “bitcoin was not a security” so it did not fall under the SEC’s purview of regulation, unless people use crypto assets as securities to raise capital for a company or venture such as in the case of ICOs.
Biden nominees and advisors
A few Biden nominees and advisors have expressed opinions on bitcoin. They might be a reflection of his approach to decentralization and cryptocurrencies.
Perhaps the most important of these is Janet Yellen, Biden’s nominee to head the Treasury Department. She was the former chair of Economic…