Bitcoin tops $42,000 as Biden kick-starts US cryptocurrency oversight

Bitcoin jumped above $42,000 intra day amid a sharp rally in digital tokens, spurred by optimism about a US overhaul of crypto oversight that Treasury Secretary Janet Yellen called “historic.”

US President Joe Biden signed an executive order on Wednesday requiring the government to assess the risks and benefits of creating a central bank digital dollar, as well as other cryptocurrency issues, the White House said.

The largest cryptocurrency rose as much as 10 per cent to $42,427 on Wednesday morning in New York, its highest level since March 2. Ether climbed 8 per cent while so-called privacy coins like Monero posted large gains.  

Wide-ranging oversight of the cryptocurrency market, which surged past $3 trillion in November, is essential to ensure US national security, financial stability and US competitiveness, and stave off the growing threat of cyber crime, administration officials said.

Yellen praised the order in a statement on the Treasury’s website on Tuesday that was later removed, saying it strikes the right balance between fostering innovation and addressing potential risks. That boosted sentiment in an industry that has long called for greater regulatory direction. 

It is the first attempt at coordinating the government’s strategy, though it falls short of providing a clear direction on regulation — something crypto firms have been clamoring for. In January, the Federal Reserve kicked the question of whether the United States should pursue a digital dollar to Congress, leading analysts to predict such a project would take years.