US President Joe Biden’s executive order to ensure the responsible development of digital assets has been widely praised for recognizing the place of cryptocurrencies and blockchain technology in the world and for leading the United States on a path toward more inclusive regulation of the sector. The order, or EO, ​​sets out a research agenda that includes consumer protection, financial stability, crime and homeland security, US subsidiary banking leadership, and responsible development.

With a series of reports required to deliver over several months and no concrete action taken, it is impossible to gauge the impact it will eventually have on the sector, or even predict how it will achieve its goals. However, this does not prevent us from drawing any conclusions from other things not found in the EO text.

Tangible effects
Senator Cynthia Loomis, a senior crypto spokeswoman, commented, “I believe his executive order overlooks the fact that the vast majority of digital asset users are law-abiding and trying to improve our financial system.”

Loomis’ comment refers to the Ethics Office’s focus on stopping crime, and there are three reports issued regarding this area. Much less attention was paid to market construction. Consumer protection has been put in the spotlight with a claim to the involvement of the Consumer Financial Protection Bureau. The Commodity Trading Commission appears to have been more prominent in EO than the Securities and Exchange Commission.

Aaron Cutler, partner at Hogan Lovells and former senior advisor to Majority Leader Eric Kantor, did not care about the relative amount of ink that goes to the various regulators. Cutler told Cointelegraph:

“The order publicizes potential regulations by acknowledging that many agencies have a role to play here, possibly to the annoyance of [SEC] Chairman Gensler.”
He added that Gensler “really has a lot to worry about.”

There is a need for regulation. An editorial in Traders Magazine said that the EO “was an important step forward, but markets need to be significantly more developed so that financial institutions can invest more in the space.”

Futures Industry Association President and CEO Walt Luken similarly spoke at the organization’s annual conference shortly after the EO’s release, saying:

“Many of the major cryptocurrency exchanges have acquired regulated futures exchanges and have identified our markets and regulatory framework as being strategically important. […] We have a resilient and thriving industry thanks to the well-thought-out regulation.”
The closing also highlighted the CFTC’s peer-to-peer derivatives clearing model that its institution “wanted” to do.

Regulators vs. Lawmakers
The current legislative environment — the Senate deeply divided along partisan lines and the Democratic Party internally divided over its stance on cryptocurrency — is denting hopes for legislative regulation. Senator Loomis is expected to introduce a bipartisan bill that will provide regulatory clarity and consumer protection. Last summer, Representative Don Baer introduced the structure of the digital asset market and the Investor Protection Act that would do the same if passed by a commission. From the looks of it, the recalled EO agencies will end up with similar results.

A rare piece of bipartisan crypto legislation was a “correction” last year in that part of the Infrastructure and Jobs Investment Act that introduced reporting requirements for certain cryptocurrency transactions from 2026. This provision enhances compliance and provides clarity on requirements tax. EA can address existing tax legislation implementation issues from the Infrastructure Act, although EA agencies have not historically introduced tax legislation. Instead, presidents send tax proposals to Congress with a budget for tax legislation.

The Tax Guide is another hole in the crypto book. “We now have advice in the form of flyers and questions and answers on the IRS website while we await future court rulings and law sections to develop official tax advice,” Jesse Rodriguez, state commissioned accountant for Kaufman Rossen, said. “There is no timetable available for the expected formal guidance.”

Treasury at the IRS
The Department of the Treasury is one of the busiest agencies under the EO, leading five reports, including one on regulatory gaps, and supporting several of the eight other reports, including crypto research, from central banks. So there may be more comprehensive evidence from the Internal Revenue Service in preparation.

Source: CoinTelegraph

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