The Future of Crypto

by Sarah Li ’25

Source: Kaspersky Fraud Prevention

Published Apr. 8th, 2022

Over the last few years, cryptocurrencies such as Bitcoin and Ethereum have become increasingly mainstream. Amidst this widespread crypto craze, a contentious debate over whether or not the government should impose regulations on such digital currencies has come into place.

On one hand, some hope a little government involvement could bring more stability to what is notoriously known to be an extremely volatile market. Furthermore, they argue, government regulations could minimize the amount of fraudulent activity and help protect investors by ensuring some sort of protection of assets. 

On the other hand, some worry government regulations would take away from what draws in so many crypto users to begin with: crypto’s decentralized nature. For users, the decentralization of crypto networks means being free from taxation on any gains, being able to make transactions without third-party interference, and being safe from inflation as the supply of cryptocurrency tokens is not set by the government. 

A major turning point in this discussion came on Wednesday, March 9, 2022, when President Joe Biden signed an executive order calling for cooperative action amongst financial agencies to dig deeper into both the opportunities and the risks that come with cryptocurrencies and discuss what potential regulations on digital currencies may look like. 

Aimed at maintaining the US at the forefront of this growing global industry, the order directs the Treasury Department to develop guidelines for crypto traders to help them avoid the dangers of fraud and market volatility, orders the Commerce Department to ensure new policies protect US leadership, commands various other agencies to examine crypto’s role in illicit financing, and perhaps most notably, instructs the Federal Reserve to look into the possibility of creating a central bank “digital dollar”.

The reaction to this new order has been, for the most part, extremely positive. Experts have called it a “step in the right direction” and “long overdue”, and those who were worried about a government crackdown on cryptocurrency were relieved to find out that it is far from that. Rather, the executive order is evidence that the government plans to take its time to develop policies that may have the least harm on the crypto industry as well as the global financial system. 

Ultimately, though at the moment it is impossible to predict to what extent the government will embrace crypto and what exactly the effect on the market will be if they do, one thing for certain is that the growing presence of crypto can no longer be ignored. 

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