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Biden orders sweeping review of crypto policy, bitcoin price spikes

Yahoo Finance's Jennifer Schonberger joins the Live show to report on President Biden's executive order to regulate cryptocurrencies.

Video Transcript

JENNIFER SCHONBERGER: Good morning, Julie. That's right, President Biden officially issuing an executive order this morning to regulate cryptocurrencies. The White House taking a holistic approach to regulating this new digital asset class. The president directing agencies across the government to study cryptocurrencies and a central bank digital currency to come up with a plan to regulate digital assets. The order lays out goals for policing crypto to protect consumers and investors against fraud, guard the financial system, and ensure the US dollar keeps its leading position in the global financial system.

Specifically, the order directs the US Treasury to lead a report on a CBDC in consultation with the Department of Justice, State, and others, to analyze whether a digital dollar is sound policy. The Justice Department is also tasked with determining whether a new law is needed to issue a CBDC. Treasury and federal banking regulators will look at what measures should be taken to protect consumers, investors, and businesses against fraud, theft, and cyberattacks within the digital assets arena. And the Financial Stability Oversight Council, created after the 2008 financial crisis to monitor risks to the economy, will study what risks digital assets pose to the financial system.

Now a senior administration official saying we need to be, quote, "clear-eyed" that earlier forms of financial innovation have ended up hurting American families and making just a few people very rich, underscoring the need for consumer protection. We are starting to hear from the industry this morning, specifically Jeremy Allaire, CEO of stablecoin issuer Circle, calling this a watershed moment. Denelle Dixon of the Stellar Foundation also weighing in, saying that the White House recognizes that blockchain technology is here to stay. Now most of these studies will last about 60 to 120 days, what steps will be taken on what to do next based on agencies' recommendations. Julie.

JULIE HYMAN: So Jenn, just to give us a little bit more on this and the move that we're seeing in cryptocurrencies, why is this seen as a good thing? Is it just the acknowledgment, right, as you said, that cryptocurrencies are-- blockchain's here to stay? It's interesting that that sort of acknowledgment, especially since this was kind of expected, right, that this acknowledgment was expected--

JENNIFER SCHONBERGER: It was expected-- sorry, Julie, didn't mean to cut you off there. Yes, it was expected. And this has kind of been delayed a bit because of what's been happening in Russia-Ukraine. But officials have been working on this, really, since last fall. And this is a big deal because the administration understands, as you said, that the crypto is here to stay, blockchain is here to stay. And this is the first step towards outlining rules of the road that the industry is really craving to operate properly. There are so many investors who are sitting on the sidelines and haven't gotten into crypto because they don't know how to comply.

And so this is the first step that's going to direct the government across the board, not just the SEC taking actions on its own or the CFTC taking actions on its own. This is a collaborative approach. And I think we're going to see something come of it here later in the year. Implementation unclear at this point-- probably next year.

JULIE HYMAN: Very interesting stuff. Thanks for keeping us posted. Appreciate it.