Executive Order Legitimizes Crypto Assets, But Highlights Conflict With Legacy Frameworks

The detailed treatment and growing acceptance seen in Biden's executive order on digital assets tend to further legitimize and normalize the crypto space.Legacy regulatory goals concerning identity, sanctions screening, and revocability of transactions are at odds with crypto assets designed to be permissionless, decentralized, and trustless.The EO and the U.S. financial regulatory framework more broadly have a principle of “same business, same risks, same rules.” The question remains how to fairly classify crypto assets.Innovations like the proof-of-stake consensus, used for example on Ethereum's Beacon Chain, defy classification and may require a crypto-specific framework from Washington.Expectations for polices out of the EO mandates include rules for ICOs, registering marketplaces, limiting lending programs, stablecoin disclosures, ETF requirements, and custody practices.