Biden Expected to Issue Executive Order on Cryptocurrency as a Step Toward Regulation
WASHINGTON (AP) — President Joe Biden is expected to sign an executive order on cryptocurrency this week that will mark the first step toward regulating how digital currency is traded.
The move comes as administration officials have raised concerns in recent weeks about Russia’s use of cryptocurrency to evade the impact of crushing sanctions in response to its invasion of Ukraine. The sanctions have sent the ruble to historic lows and have closed the country’s stock market.
According to two sources familiar with this process, an executive order on cryptocurrency was due out by the end of the week. The decision had been made long before the outbreak. The order was revealed by both the people who spoke to us on condition that they remain anonymous.
It is anticipated that the order will outline what agencies (including Treasury Department) need to do in order to create policies and regulations for digital currency. It is expected to include a request for the State Department to ensure that American cryptocurrency laws are aligned with those of U.S. allies and will ask the Financial Stability Oversight Council — which monitors the stability of the U.S. financial system — to study illicit finance concerns.
In addition, the order will examine the possibility of creating a new digital currency central bank. In January, the Federal Reserve published a paper that explored the benefits and risks of U.S.-backed cryptocurrency.
The order makes clear that cryptocurrency will continue to be a major part of America’s economy for many years. The White House’s plans to move forward with the executive order were first reported by Bloomberg News.
While U.S. officials have played down the significance of cryptocurrency to Russia’s ability to evade sanctions, it remains a concern.
“We will continue to look at how the sanctions work and evaluate whether or not there are liquid leakages and we have the possibility to address them. I often hear cryptocurrency mentioned and that is a channel to be watched,” Treasury Secretary Janet Yellen said last week.
A senior administration official who spoke on condition of anonymity said the president’s national security team has already been on the lookout for the use and creation of front companies and alternative financial institutions that Moscow might try to employ to get around sanctions.
The Biden administration wants to protect crypto as part of its efforts to ensure that Russia sanctions have the maximum effect. The official said past experiences in Iran and Venezuela with sanctions evasion are informing the administration’s efforts. According to the official, additional sanctions and targets for export control will also be announced in the weeks and days ahead in order to fight Russian efforts to evade sanction enforcement.
On Monday, Treasury’s Financial Crimes Enforcement Network issued an alert advising financial institutions to be “vigilant” against any efforts to evade sanctions in connection with Russia’s war in Ukraine.
“Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,” acting Director Him Das said in a statement.