President Joe Biden signed an executive order on Wednesday calling on the government to assess the risks and benefits of cryptocurrencies while developing ways to regulate digital assets. With this order, the White House not only acknowledged that crypto is here to stay, but plans to make a national policy to make the industry less risky for the investor.

Bitcoin (BTC)--the world's largest crypto by overall market capitalization--rose as much as 11% on Wednesday, crossing over the key $40,000 threshold. Other digital coins like ether (ETH) also rose sharply higher on the news.

Here's key aspects of the executive order:

Investor Protection:

One of the main tenets of the order is to establish policies to protect consumers, investors and businesses in the United States from the possible financial risks posed by buying crypto.

The order acknowledges that market failures of major crypto exchanges have resulted in billions of dollars in losses. The industry has also been rife with scams and rug-pull schemes, as well as cyberattacks on both exchanges and individual holders.

The Biden administration is calling on the U.S. Treasury to research and develop policy recommendations to "ensure sufficient oversight and safeguard against any systematic financial risks posed by digital assets."

"The United States should ensure that safeguards are in place and promote the responsible develop of digital assets to protect consumers, investors, and businesses; maintain privacy; and shield against arbitrary or unlawful surveillance," the order reads.

Financial Stability:

Adding to investor protections, the Biden administration is looking to mitigate systemic risk to protect the U.S. and global financial stability when it comes to digital assets.

The order asserts that some crypto platforms have grown so rapidly in recent years, outpacing the speed of regulations and compliance measures. "Digital asset issuers, exchanges and trading platforms, and intermediaries whose activities may increase risks to financial stability, should, as appropriate, be subject to and in compliance with regulatory and supervisory standards that govern traditional market infrastructures and financial firms, in line with the general principle of 'same business, same risks, same rules.'," the order reads.

Stop Illicit Activity:

Under the order, Biden has called for an "unprecedented focus of coordinated actions" across a broad swath of federal agencies to manage the illicit financial and national security risks surrounding digital assets.

These risks include money laundering, cybercrime and ransomware, narcotics and human trafficking, and terrorism and proliferation financing, according to the order.

"The United States must ensure appropriate controls and accountability for current and future digital assets systems to promote high standards for transparency, privacy, and security - including through regulatory, governance, and technological measures - that counter illicit activities and preserve or enhance the efficacy of our national security tools," the order reads.

U.S. Competitive Edge:

Part of the order focuses on reinforcing the United States leadersing on the financial world stage and in technological and economic competitiveness.

"The United States has an interest in ensuring that it remains at the forefront of responsible development and design of digital assets and the technology that underpins new forms of payments and capital flows in the international financial system," the order reads.

As part of this directive, Biden has called on the Department of Commerce to establish "a framework to drive U.S. competitiveness and leadership in, and leveraging of digital asset technologies". This includes exploring the creating of a digital dollar, or central bank digital currency.

The U.S. Federal Reserve recently began researching the potential risks and benefits of a CBDC, with policymakers releasing a detailed report. However, the central bank has yet to make a definitive decision on the U.S. issuing a potential digital dollar.

Financial Inclusion, Responsible Innovation:

The order aims to promote broad asses to digital currencies in a safe and affordable way for all Americans.

"The United States has a strong interest in promoting responsible innovation that expands equitable access to financial services, particularly for those Americans underserved by the traditional banking system, including by making investments and domestic and cross-border funds transfers and payments cheaper, faster, and safer, and by promoting greater and more cost-efficient access to financial products and services," the order reads.

The Biden administration is also calling on the government to support technologies that promote responsible development and use of digital assets. This means that U.S. aims to regulate the crypto ecosystem to ensure privacy and security, as well as mitigate negative environmental impacts that may result from crypto mining.