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Biden administration readies executive order on crypto

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Yahoo Finance's Jennifer Schonberger joins the Live show to discuss the White House's plans to release a National Security Council memorandum that will regulate cryptocurrencies as soon as early February.

Video transcript

BRAD SMITH: Welcome back to Yahoo Finance Live, everyone. Bitcoin is attempting to find support. It's in the green today. That's after falling to 33,000 to start off the week. And the broader crypto market, even amid some of these broader declines, they may alter the White House's plans for regulation. Here with more, we've got Yahoo Finance's own Jen Schonberger. Jen, what can you tell us about this?

JENNIFER SCHONBERGER: Yeah, hey there, Brad. Bitcoin and the overall cryptocurrency complex rebounding this morning off the lowest level since last summer, just as the Biden administration is prepared to release a brand new government-wide strategy to regulate cryptocurrencies. A Biden administration official tells me they will release a National Security Council memorandum as soon as early February that will task federal agencies with assessing the risks and opportunities that crypto poses. It will delve into the details of a central bank digital currency, the impact of digital assets on financial stability, and normalizing regulations for crypto with other countries.

The action, first reported by Bloomberg News, comes as agencies across the government examine new rules for crypto. Last fall, the Biden administration released recommendations proposing that only banks be allowed to issue stablecoins. And Jaret Seiberg, an analyst at Cowen, called the administration's expected actions, quote, "symbolically significant," as the White House would be acknowledging that crypto was becoming economically important and is here to stay.

And while crypto may be rebounding today, investors might want to put on their seatbelt. Matthew Hou, the CIO at Bitwise Asset Management, says that the market is pricing in a very bearish executive order. He says this is contributing to volatility in the crypto markets and that volatility will be the name of the game between now and when that order is released. Brad.

AKIKO FUJITA: Jen, I'll pick it up from here. I feel like volatility is the word of the month. Thanks so much for bringing us that story.

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