Cryptocurrencies rose sharply on Wednesday after the US Treasury mistakenly released some of Janet Yellen’s praise for the order to regulate digital currencies that US President Joe Biden issued on Wednesday. The US Treasury secretary said the overhaul of crypto oversight will be historic as it strikes the right balance between innovation and potential risks, resulting in “great benefits for the country, consumers and businesses. It will also address risks with illicit transactions, which will protect investors,” the statement said.

Thus, the price of bitcoin is up more than 10 per cent and has reached US$42,000, trading at US$42,183. For its part, the price of ethereum is up more than 8.5% and is trading at US$2,746, which boosts the market capitalization of all cryptocurrencies, which is up 5.7% and reaches 1.85 trillion dollars. 

The rally comes after US President Joe Biden on Wednesday ordered his administration to evaluate the creation of a US digital currency, backed by the Federal Reserve, according to the White House. The president will sign an executive order for his government to urgently investigate the possibility of developing a central bank digital currency, which would be backed by the country’s financial institutions.

A number of countries have so far launched digital currencies under the umbrella of their central banks, including Nigeria with its e-Naira, the Bahamas with its Sand Dollar, and the DCash currency, available in Antigua and Barbuda, St. Kitts and Nevis, Montserrat, Dominica, St. Vincent and the Grenadines, St. Lucia, and Grenada. According to the International Monetary Fund (IMF), a hundred countries are also exploring the possibility of creating their own cryptocurrencies, which are unlike bitcoin because they have a single issuer (the central bank of each country) that controls the money market, just as with paper currencies.

Unlike the money that the user currently perceives as virtual, these cryptocurrencies would be issued directly by the central bank, so that a citizen could have a digital wallet with that currency without being linked to any commercial financial institution. Moreover, they would allow, in the style of cryptocurrencies, immediate transactions of all kinds without, for example, a money transfer between individuals taking several hours or days to materialize.

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