Biden executive order on cryptocurrency a disaster for US industry: Ex-Treasury official

Former Acting Assistant Treasury Secretary Gregory Zerzan explained on Tuesday the "unfortunate thing" about President Biden's executive order on government oversight of cryptocurrency, arguing that taking "a top-down government-run approach" is "not a pathway to innovation."

"The unfortunate thing about the order is instead of saying, ‘Look, crypto should be allowed to flourish here in the United States,’ it takes a top-down government run approach that asks every federal department from the EPA [Environmental Protection Agency] to the Department of Justice to Homeland Security to figure out how they can regulate crypto," Zerzan told "Mornings with Maria" on Tuesday. "That’s not a pathway to innovation." 

He went on to argue that the only thing not blamed on cryptocurrencies in Biden's executive order is COVID-19. 

"The order literally calls crypto a risk for everything from human rights to climate change to criminal enterprises," he told host Maria Bartiromo. 

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Last week, President Biden signed the executive order on crypto oversight that urges the Federal Reserve to explore whether the central bank should create its own digital currency.

Treasury Secretary Janet Yellen said the move would "promote a fairer, more inclusive, and more efficient financial system" while offsetting unlawful finance and preventing national security and financial stability risks.

The Biden administration views the massive popularity in crypto as an opportunity to examine the risks and benefits of digital assets, the Associated Press reported, citing an anonymous senior administration official who previewed the order the day before it was signed. Under the executive order, Biden also reportedly directed the Treasury Department and other federal agencies to examine the impact of crypto on financial stability and national security.

Zerzan also reacted to reports that the European Union reportedly rejected a proposed rule on Monday that could have banned Bitcoin, calling it "a positive development."

"The danger with the European approach is the same danger in the executive order, which effectively it says, ‘You have to go to government and get permission before you can innovate,’" he told Bartiromo. "That’s not the pathway to successful economies."

"My great hope from the executive order is that Congress is not going to follow the suggestions that ultimately come out of it," he added. 

Ticker	Security	Last	Change	Change %
COIN	COINBASE GLOBAL INC.	321.00	-4.41	-1.36%
BITQ	BITWISE CRYPTO INDUSTRY INNOVATORS ETF - USD DIS	20.21	+0.72	+3.71%

In cryptocurrencies, bitcoin hovered around the $38,000 level on Tuesday. 

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Zerzan argued that crypto’s "promise has yet to be realized and it won’t be realized if we drown it in a sea of red tape."

He then provided his insight as it pertains to owning the digital assets. 

"I would say watch this space and as Americans, we have to hope that our government doesn’t overregulate before it meets its promises," Zerzan said. 

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The Associated Press contributed to this report.