WASHINGTON – President Joe Biden is set to sign an executive order on cryptocurrency expected this week, marking the first step toward regulating how digital money is exchanged.
The action comes as administration officials expressed alarm in recent weeks about Russia’s use of cryptocurrencies to avoid the effect of crippling sanctions imposed in response to its invasion of Ukraine. The sanctions have driven the ruble to unprecedented lows and forced the country’s stock exchange to shut.
The cryptocurrency expected this week was anticipated to be published this week, according to two individuals familiar with the process, and it had been in the works long before the battle. Both individuals spoke on the condition of anonymity in order to preview the order.
The directive is likely to outline what federal agencies, including the Treasury Department, must undertake to implement digital currency laws and regulations. It is expected to include a request to the State Department to ensure that American cryptocurrency laws are consistent with those of the United States’ allies, as well as a request to the Financial Stability Oversight Council, which monitors the stability of the United States’ financial system, to investigate illicit finance concerns.
Furthermore, the order will investigate the viability of a new central bank digital currency. In January, the Federal Reserve published a report on the subject that examines the risks and advantages of US-backed digital money.
The order implies that cryptocurrencies will continue to be a part of the US economy for many years to come. Bloomberg News was the first to report on the White House’s intentions to proceed with the executive order.
While US officials have downplayed the importance of cryptocurrencies in Russia’s ability to avoid sanctions, it remains a source of worry.
“We will continue to examine how the sanctions function and determine whether or not there are liquid leaks that can be addressed. I often hear the term “cryptocurrency,” and that is a channel to follow “Last week, Treasury Secretary Janet Yellen said.
According to a senior administration source who spoke on the condition of anonymity, the president’s national security team has already been on the watch for the usage and formation of front firms and other financial institutions that Moscow may attempt to use to circumvent sanctions.
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Crypto is one of the areas in which the Biden administration is aiming to strengthen in order to ensure that sanctions on Russia have the greatest possible effect. The person said that the administration’s actions are informed by previous experiences with sanctions evasion in Iran and Venezuela. Additional export limits and additional sanction targets are also anticipated to be announced in the next days and weeks to fight Russian sanctions evasion attempts, according to the official.
The Treasury’s Financial Crimes Enforcement Network issued an advisory on Monday, asking financial institutions to be “vigilant” against any attempts to dodge sanctions related to Russia’s conflict in Ukraine.
“While we have not detected widespread evasion of our sanctions using techniques such as cryptocurrencies, early reporting of suspected behavior adds to our national security and our efforts to protect Ukraine and its people,” said Acting Director Him Das in a statement.