The White House has now issued the long-awaited directive, which mandates the government to assess the risks and benefits of digital assets and develop a digital counterpart of the dollar.

There are seven specific measures

The order calls for seven particular actions to be taken

The first is to safeguard American consumers, investors, and enterprises. The Treasury Department is required by the government to investigate cryptocurrency and provide regulatory recommendations. According to the paper, regulators should "provide proper monitoring and safeguard against any systemic financial risks posed by digital assets." This is especially important given the numerous crypto fraud incidents we've seen over the years.

Another important strategy is to safeguard financial stability in the United States and around the world. The regulation encourages the Financial Stability Oversight Council to identify and mitigate the financial risks that digital assets pose to the entire economy.

The statement also calls for advancing US leadership and giving the US a competitive advantage over other countries. The Department of Commerce has been tasked with developing a framework to boost US competitiveness and leadership in digital asset technologies in this approach.

The importance of climate change sensitivity in the development of digital assets was also stressed in the paper. It's especially crucial to be responsible while supporting technological advancements and guaranteeing the safe creation and usage of digital assets, given that crypto mining has significant environmental consequences.

The digital currency

The order also includes research of a digital version of the dollar known as the US Central Bank Digital Currency (CBDC). The digital dollar would be valued the same as its paper counterpart, unlike cryptocurrencies, which have wildly variable pricing.

Last year, the central bank published a paper on the benefits and drawbacks of such digital assets, but no statements were made regarding whether the United States should create one. The White House has now urged that the government prioritize CBDC research and development, despite the fact that the country will not launch its own digital currency right away.

A victory for cryptocurrency investors

For an industry that has already witnessed many regulatory scandals, the new policy plan removes a key source of uncertainty.

Bitcoin values soared past $42,000 on Wednesday as a result of the US executive move. In a tweet announcing the laws, Jeremy Allaire, CEO of the crypto business Circle, called it "a watershed moment for crypto."

Time will tell how much of an impact this regulation has on the shaky sector. But, for the time being, things appear to be looking up for crypto investors, as many of them appear to concur with Allaire.