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When President Joe Biden signed an executive order aimed at cryptocurrency this week, it marked a pivotal moment in the history of digital currencies, taking bitcoin, ethereum and other crypto tokens a big step closer to someday becoming a legitimate financial option for all Americans, one industry observer told CBS News.

"Joe Biden just gave crypto companies the green light to exist," David Wachsman, the CEO of Wachsman PR in New York, told CBS News Streaming. "What they have to do now is behave responsibly."

Under the executive order, Biden directed the U.S. Department of Treasury and other federal agencies to study the impact of cryptocurrency on financial stability and national security. The order also asked the Federal Reserve to explore whether the central bank should create its own digital currency.

Mr. Biden's executive order has been widely anticipated by the finance industry and crypto traders, as well as lawmakers who have compared today's cryptocurrency market to the Wild West.

Although considered a highly unstable form of money by most financial experts, bitcoinreached its highest price point last year, in part because more companies began accepting it as a form of payment. Some athletes and politicians are nowreceiving parts of their salaryin crypto, while Wall Street has created exchanged-traded funds around crypto futures.

Once the price of bitcoin, ethereum and others started to skyrocket, crypto companies made splashy moves.Coinbase went public on the Nasdaq last Apriland Crypto.com aired a widely seen commercial featuring Hollywood star Matt Damon.

Despite the risks of wild price swings, roughly 40 million people in the U.S. have invested in cryptocurrencies, surveys show. About 43% of men between ages 18 and 29 have put money into crypto, according to Pew Research data.

Wachsman said Mr. Biden's order shows that the president understands the potential of digital currencies.

"We just heard Joe Biden say that cryptocurrencies can be important for the future of the U.S. economy," he said. "And he didn't just mean the rich people on top, the investors. He meant the middle class and the working class."

The price of the most popular cryptocurrencies including bitcoin, solana and ripple either fell or remained flat during trading activity Friday.

The Associated Press contributed to this report.

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Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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Biden's executive order boosts prospects for cryptocurrency - CBS News