United States President Joe Biden is set to sign a highly anticipated and long-awaited executive order on cryptocurrencies sometime this week. The order is widely seen as the first step towards regulating digital currencies and how they are traded.
The order will direct the justice department, Treasury, and other agencies to study the legal ramifications regarding the creation of a central bank digital currency (CBDC). The news about the executive order comes amidst growing concerns about Russia using cryptocurrencies to avoid the impact of sanctions imposed on it as a result of the invasion of Ukraine. The sanctions have hit Russia hard, sending the Rouble to historic lows.
Developing Policies And Regulations
Sources close to the matter have revealed the executive order will be issued this week but had been under deliberation much before the war. The order will describe what government agencies, including the treasury department, need to do in order to develop policies and regulations for digital currencies.
The order will also contain a request to the State Department, directing it to ensure that American cryptocurrency laws align with its allies. It will also ask the Financial Stability Oversight Council, which is tasked with monitoring the stability of the United States Financial System, to conduct a thorough study regarding any concerns about illicit financing.
The order also sets a 180-day deadline for a series of reports that explore the future of money and the role that cryptocurrencies could play.
“We could see a significant shift in policy in 180 days. This is a likely step toward the creation of a central bank digital currency.”
A New CBDC
The executive order also explores the possibility of creating a new Central Bank Digital Currency. The Federal Reserve had already issued a paper regarding CBDCs, detailing the benefits and risks of a US-backed digital currency.
According to experts, the order is implicit in stating that cryptocurrencies are set to be a part of the US economy for the foreseeable future.
Concerns Around Russia
While playing down the role of cryptocurrencies in allowing Russia to minimize the impact of sanctions, US officials remain concerned. Jenet Yellen, Treasury Secretary, stated,
“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.”
Officials also revealed that the National Security team is already on the lookout for front companies that Russia could use to get around the sanctions imposed on the country. The Biden administration is looking to shore up crypto to ensure that sanctions placed on Russia have the maximum impact. New sanctions are set to be revealed in the next few days.
Financial institutions have also been asked to remain vigilant through an alert issued by the Treasury’s Financial Crimes Enforcement Network. Him Das, Acting Director of the Financial Crimes Enforcement Network, Stated,
“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.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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