The United States government, under President Joe Biden’s administration, has intensified its scrutiny of the cryptocurrency industry. The US Securities and Exchange Commission (SEC) has been tasked with increasing its crackdown on crypto projects, and it seems apparent the Biden administration wants to destabilize the crypto market in an attempt to retain the global reserve currency status of the US dollar.
However, recent reports suggest that the emergence of the BRICS nations, led by Russia and China, has reduced reliance on the US dollar as the global reserve currency. Despite this, the dollar still holds the majority stake at about 58%.
The crackdown on crypto organizations has become more pronounced since the implosion of FTX and Alameda Research towards the end of last year, which was described as the largest American corporate failure in modern history. The US government has increased its focus on crypto organizations operating within the country’s jurisdiction. The SEC’s recent announcement that all digital assets besides Bitcoin are unregistered securities is just one example of the crackdown.
According to recent revelations by Fox Business reporter Eleanor Terrett on Twitter, the US government, in conjunction with the Democratic Party, is pushing the SEC to handle crypto regulations. The leaked memorandum indicates that the Biden administration is pushing Gary Gensler, the SEC Chair, to regulate through enforcement. The document states that Congress should avoid inventing new accommodating regulatory structures simply because crypto companies refuse to follow clear rules of the road.
Despite the US government’s efforts to regulate the crypto market, prices for leading cryptocurrencies like Bitcoin and Ethereum have remained relatively stable compared to market equities. The sentiment among the crypto community is that the Biden administration wants to destabilize the market, but its efforts may not lead to a sharp drop in Bitcoin and Ethereum prices.
Gensler has requested a hefty $2.4 billion for the financial year 2024 to help in regulatory efforts, but crypto companies are pushing for clear regulations similar to the ones in Europe through MiCA. Ripple Labs through CEO Brad Garlinghouse has noted that the company has spent approximately $200 million fighting against the SEC over XRP sales. Coinbase, the leading publicly traded exchange in the United States, has also increased its effort to fight for clear crypto regulations.
Although most US-based crypto firms have increased their focus on international markets, volatility in the crypto market is expected to remain high as speculation increases over the regulatory sphere in the United States. The increasing crackdown on crypto projects may signal a shift in the government’s attitude towards cryptocurrencies. However, whether it will result in a sharp drop in Bitcoin and Ethereum prices remains to be seen.
In conclusion, the US government’s recent actions towards the crypto industry suggest an attempt to destabilize the market and retain the global reserve currency status of the US dollar. However, the emergence of the BRICS nations has reduced reliance on the dollar as the global reserve currency. Despite the crackdown on crypto projects, the prices of leading cryptocurrencies like Bitcoin and Ethereum have remained relatively stable. The push by crypto companies for clear regulations like those in Europe through MiCA signals a growing need for regulatory clarity in the crypto industry. As such, volatility in the crypto market is expected to remain high, and the US government’s actions will indeed continue to be a point of speculation among industry experts and stakeholders.
