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 order is expected to describe what government agencies, including the Treasury Department, need to do to develop policies and regulations on digital currencies, the Associated Press reported, citing anonymous sources.
Central Bank Digital Currency
The sanctions have sent the ruble to historic lows and have closed the country’s stock market.
The move comes amid concerns about Russia’s use of cryptocurrency to evade the impact of a wave of sanctions by the US. and the European Union in response to its invasion of Ukraine.
The order 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.
The order will explore the possibility of a new central bank digital currency. The Federal Reserve issued a paper on the topic in January that explores the risks and benefits of U.S.-backed digital currency.
Other studies will be ordered on the impact of a cryptocurrency on competitiveness, the market and technical infrastructure needed, and the environmental impact of bitcoin mining, Reuters reported.
The executive order on cryptocurrency was expected to be issued this week and it had been in the works long before Russia’s invasion of Ukraine.
The White House last year said it was considering a wide-ranging oversight of the cryptocurrency market – including an executive order – to deal with growing threat of ransomware and other cyber crime.
Efforts to Avoid Sanctions
Biden’s national security team has 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 Financial Crimes Enforcement Network (FinCEN) issued an alert Monday 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.
Additional export controls and new sanction targets are also expected to be unveiled in the days and weeks ahead to counter Russian sanction evasion efforts.
Reaction on social media appeared to be mostly negative.
“So the US wants a currency that can be easily tracked, linked to you, shut off at any time for any reason our leaders deem fit, and allows our leaders to profit off our money in a new way,” one person wrote on Twitter. “Hard pass.”
“Backed by what?” another person tweeted. “Empty promises?? We are 30+ trillion in debt!”