President Biden on Wednesday issued a long-awaited executive order tasking federal agencies with developing a regulatory framework for digital assets such as cryptocurrencies that should pave the way for their wider use in the financial system. 

The unveiling of the order, which prompted a broad rally in cryptocurrency markets, amounts to a tacit admission that Bitcoin and other cryptocurrencies are here to stay. It should also quell fears in some circles that the U.S. government will crack down on or ban cryptocurrencies, as some governments — such as Beijing — have done.

The order directs the Federal Reserve to make an urgent priority of researching and developing a Central Bank Digital Currency, or digital dollar, should doing so be deemed in the national interest.

Many of the major players in crypto circles welcomed the administration’s move, praising it as an opportunity for digital assets to emerge from the shadows of a shadier past, when they were known primarily as conduits for the procurement of illicit goods and services on the dark web, or as the purview of scam artists seeking to fleece naive investors.

A crypto trade group, the Blockchain Association, said in a statement that the order affirms the industry’s integral role as a “fundamental pillar of the U.S. economy” and said its members are eager to collaborate with the administration as it draws up the new rules and regulations.

The group said it has “long called for a clear, unambiguous, and pro-innovation approach to federal policy for the growing crypto industry.

“The White House’s directive to coordinate oversight is further proof that the crypto ecosystem is now a vital and inseparable part of the national economy,” the group said.

Crypto billionaire Cameron Winklevoss, one of the so-called whales of the industry, said in a tweet that he sees the order as a positive one for the sector.

“I applaud this constructive approach to thoughtful crypto regulation and look forward to working together with the various stakeholders to ensure that the US remains a leader in crypto,” he said.

Blockchain is the underlying technology that allows for cryptocurrencies. It functions much like a huge database archived on hundreds, if not thousands, of computers. Transactions on the blockchain, such as Bitcoin trades, are visible to all, but the parties making those transactions can remain anonymous.

Instead of directing any specific regulations for the sector, Mr. Biden’s mandate, the first such order dealing with digital assets, seeks to organize work already under way at the myriad of regulatory agencies touched by cryptocurrencies and to expand research into other areas. A key goal, according to a fact sheet issued by the White House, is identifying the risks posed by cryptocurrencies to investors, businesses, and financial markets, as well as to the broader economy. 

“The entire premise of this executive order and the spirit behind it is that this is a growing area, an area that is presenting increasing risks and also potential opportunities, and that it’s important that we very quickly fully document and understand what those are and move quickly to address them,” a senior administration official told reporters on a call about the order.

The treasury secretary, Janet Yellen, said in a statement that the order will help America develop a comprehensive and coordinated approach to digital asset policy.

“This approach will support responsible innovation that could result in substantial benefits for the nation, consumers, and businesses,” Ms. Yellen said. “It will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy.”

Ms. Yellen’s statement, accidentally released late Tuesday before the order was signed, led to a broad rally in cryptocurrencies, which had declined significantly in recent days — along with many international equity markets — because of uncertainty stemming from the war in Ukraine.

The market cap of Bitcoin, which accounts for more than 40 percent of the cryptocurrency market, and Ethereum, which accounts for 17 percent of the market, both rose more than 10 percent in the hours following Ms. Yellen’s statement. The broader market, encompassing dozens of smaller cryptocurrencies, gained nearly 8 percent in value.

The total market cap of all cryptocurrencies now hovers at nearly $2 trillion, down from its peak of $3 trillion last November but up from $14 billion five years ago. Recents surveys suggest that as many as 40 million Americans are invested in cryptocurrencies.

Ms. Yellen’s statement said the Treasury Department, in conjunction with other agencies and international partners, will produce a report on the future of money and payment systems. The agency also promised to look closer at stablecoins, cryptocurrencies that track fiat currencies such as the dollar, and the potential for “illicit financing risks” — such as the evasion of international sanctions — associated with the market.

“Treasury will work to promote a fairer, more inclusive, and more efficient financial system, while building on our ongoing work to counter illicit finance, and prevent risks to financial stability and national security,” Ms. Yellen said in the statement.