Bitcoin surged in value on Wednesday after US President Joe Biden signed an executive order to require US government agencies to assess the risks and benefits of creating a central bank digital dollar, potentially expanding the use of virtual currencies within the American financial system.
The US Treasury and Commerce departments and other agencies will be required to prepare reports on "the future of money" and the role cryptocurrencies will play as part of efforts to country's "first-ever comprehensive federal digital assets strategy".
Bitcoin rose 9.1% in value to $42,280 on Wednesday evening before losing most of its gains overnight, while rival Ethereum hit a high of $2,740 after adding 6.3% before dropping again in what the currencies best days this month.
Brian Deese, director of the US National Economic Council (NEC), and Biden's National Security Advisor Jake Sullivan said the order would position the US to "keep playing a leading role in the innovation and governance of the digital assets ecosystem" while protecting consumers and US interests.
"This [executive order] marks an intensification of our efforts to promote responsible innovation in the digital assets space – innovation that works for all Americans, protects our national security interests, and contributes to our economic competitiveness and growth," they added.
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They went on to say that "an American approach to digital assets" would encourage innovation while mitigating risks to consumers, broader financial stability and the environment.
"We are clear-eyed that 'financial innovation' of the past has too often not benefited working families, while exacerbating inequality and increasing systemic financial risk. This history underscores the need to build robust consumer and economic protections into digital asset development," they said.
The order represents the first time the White House has formally weighed in on cryptocurrency, and advocates of the technology welcomed the intervention of the US government as a positive for the sector.
"We applaud the White House for recognizing this as a defining moment for U.S. innovation on the world stage,” Faryar Shirzad, chief policy officer at US crypto exchange Coinbase Global, tweeted "We look forward to continuing our work with regulators and lawmakers."
In a statement that was quickly taken down, US Treasury Secretary Janet Yellon said the order "calls for a coordinated and comprehensive approach to digital asset policy [that] will support responsible innovation".
Biden's intervention comes weeks after EU Commissioner Mairead McGuinness said there was a "global need" for regulation in the crypto space.
(Pic: Getty Images/Getty Images)
