A Cornell University economics professor says that President Joe Biden’s executive order on the regulation of cryptocurrency could benefit the industry. “Ultimately what these sorts of regulations provide to the industry is legitimacy,” said the professor.
Cornell Professor on Crypto Industry Benefiting From Biden’s Executive Order
Eswar Prasad, professor of economics at Cornell University, shared his thoughts on U.S. President Joe Biden’s crypto executive order and what it means for the industry in an interview with CNBC, published Thursday.
Prasad, the Nandlal Pa. Tolani senior lecturer in trade policy and professor of Economics at Cornell University’s Charles H. Dyson School of Applied Economics and Management is Prasad. He previously served as chief of the financial studies division in the International Monetary Fund (IMF)’s research department and head of the IMF’s China division.
Professor at Cornell has warned repeatedly about the dangers cryptocurrency presents to financial and monetary stability. He stated that Bitcoin might not survive much longer in December of last year.
Wednesday’s executive order by President Biden on cryptocurrency regulation was issued. The professor explained that the executive order basically “tasks various U.S. agencies and institutions” to come up with a “comprehensive plan for the regulation of a broad set of digital assets, including decentralized cryptocurrencies such as bitcoin, but in addition, stablecoins. The executive order also examines the possibility of creating a digital U.S. Dollar.
Prof.
Regulation is absolutely necessary in these various areas. It is still a Wild West. There are many opportunities for decentralization, as well as the possibility of new technologies potentially democraticizing finance.
However, Prasad noted: “But, on the other hand, there is a risk that these technologies could be used for illicit financing. They could end up not providing the sort of investor protection that is necessary to make sure that retail investors understand the risks of what they’re getting into.”
Moreover, the professor detailed: “You have financial stability risk as well, including from stablecoins, which might seem like the safest of instruments but are beginning to essentially function like unregulated money market mutual funds.”
Noting that “the idea behind the [executive] order is to start thinking about the functionality of these different assets and technologies and thereby regulate them,” the Cornell professor said:
Actually, it might end up benefiting the industry … Because ultimately what these sorts of regulations provide to the industry is legitimacy.
Prasad observed that while the details of the regulation may be criticized by the crypto industry, he believes that they should all be favorable for the sector.
He concluded, however:
Overall, the industry will benefit from some clarity in regulatory matters. This could help to harness the benefits and reduce the risks of the new technologies.
Many people in the crypto sector are encouraged by Biden’s crypto executive order. “This is an affirmation that crypto is here to stay,” a crypto company’s executive described.
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