Biden Signs Executive Order on Digital Assets, Shaping US Crypto Policy
On March 9, President Biden signed an executive order on digital assets, marking a significant step towards shaping the United States’ cryptocurrency policy. This development is expected to have far-reaching implications for the crypto ecosystem and may help dispel doubts about the longevity of the market.
Comprehensive Plan for Handling Digital Assets
The executive order outlines a comprehensive plan for handling digital assets, including due dates and a whole-of-government approach. This move is likely to set the tone for how the US will approach cryptocurrency in the future, and its impact could be felt globally.
Luxembourg’s Crypto-Assets Landscape
In February 2022, PwC Luxembourg released a report on “Crypto-Assets: Paradigm Shift or Short-Term Trend?” which surveyed the country’s financial services landscape. The study found that while there is enthusiasm for crypto-assets, many respondents remain hesitant, with 39% having no plans to engage in crypto-related activities.
Key Findings
- A mix of enthusiasm and hesitation around crypto-assets, with 18% considering it a strategic priority and 43% expecting it to become one in the next two years.
- The majority (61%) are either embarking or planning to embark on their crypto journey, while 22% are assessing the opportunity and 39% have no plans.
- Alternative funds are seen as the most appropriate structure for crypto-assets, with 70% of respondents favoring this option.
The Future of Crypto-Assets
Despite the growing popularity of cryptocurrencies, the industry still faces significant challenges. Regulatory fragmentation, lack of clarity on mainstream energy concerns, and perception of the sector as opaque are major hurdles that need to be addressed.
To seize the opportunity in the crypto-asset space, financial players will require a regulatory environment that provides protection and certainty comparable to established asset classes. Luxembourg can position itself at the leading edge of this industry by enhancing coordination and cohesion between incumbents and traditional players, developing financial education on crypto-assets, and maintaining an open dialogue with market participants.
Expert Insights
Thomas Campione, CFA Blockchain and Crypto-Assets leader at PwC Luxembourg, believes that 2022 will be a pivotal year for the crypto-asset management industry. “It is critical that Luxembourg and the broad financial industry embrace the topic and do not stay away from the conversation because of contradictory signals,” he emphasized.
As the global crypto-asset industry continues to expand rapidly, with almost 300 million owners worldwide as of December 2021, it remains to be seen how challenges will be addressed and surmounted. One thing is certain – the future of crypto-assets largely depends on regulatory clarity and a supportive environment for financial players.