The landmark cryptocurrency executive order signed by President Joe Biden last week sent the price of bitcoin surging and drew cheers from major players in crypto, as the call to comprehensively study digital currency marked the first step toward regulation that would make it a legitimate feature of the U.S. financial system.
Industry juggernauts like Circle, Binance, FTX.US and Coinbase (COIN) voiced their support for the initiative, Yahoo Finance’s David Hollerith reported.
In a new interview, venture capitalist Adam Dell — the founder and CEO of a new investing platform called Domain Money — added his optimism to the chorus of praise for the move.
Regulation can expand the utility of cryptocurrency by bringing it into the financial mainstream, and better protect investors from the risks posed by the new asset, he said.
“We welcome and invite regulation into this industry because it’s an important step in its maturity,” says Dell, the brother of Dell (DELL) CEO Michael Dell.
The much-anticipated executive order directs the U.S. Treasury and other federal agencies to study the effect of digital currency on financial markets and national security.
The move sets the U.S. on a path toward regulation of digital currency amid a host of disparate approaches taken by other nations.
In September, El Salvador became the first country to allow residents to use cryptocurrency as legal tender in all transactions. That effort contrasts with China, which that same month joined other countries that have banned cryptocurrency mining and trading.
Dell, who departed Goldman Sachs last year after leading its online-only bank Marcus, pointed to the crackdown in China as evidence that the digital currency market can endure aggressive regulation.
“China’s efforts to try to clamp down on this activity had virtually no impact on the overall value of the market or trading activity for that matter,” Dell says. “It just shows you that information wants to be free and markets want to be free.”
Last Wednesday, when Biden signed the executive order, the price of bitcoin (BTC-USD) rose as much as 10% above where it stood at the start of the prior day. As of Thursday morning, however, the price held at just 1.6% above where it stood a day before the executive order.
The executive order came after indication from Biden administration officials about the need to regulate cryptocurrency.
Treasury Secretary Janet Yellen in August urged speedy adoption of rules for stablecoins, a form of cryptocurrency that pegs its value to a commodity or currency, like the U.S. dollar. That month, SEC Chair Gary Gensler described the crypto market as the “wild wild West” and has since indicated a desire to regulate it.
“It’s incumbent upon the United States as a leader in financial systems and in financial markets to think through the policy decisions around what is a stable digital currency,” Dell says.
“How do we bring this nascent market into mainstream financial functions, while at the same time protecting investors from the things that are scary and may not be as aboveboard about this industry?” he adds.