By FATIMA HUSSEIN and AAMER MADHANI – Associated Press
WASHINGTON (AP) — President Joe Biden is expected to sign a cryptocurrency executive order 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 crippling sanctions in response to its invasion of Ukraine. . The sanctions sent the ruble to historic lows and shut down the country’s stock market.
Two people familiar with the process said the cryptocurrency executive order was due out this week and was in the works long before the war. The two spoke on condition of anonymity to preview the order.
The order is expected to outline what government agencies, including the Treasury Department, must do to develop policies and regulations on digital currencies. It is expected to include a request for the State Department to ensure that US cryptocurrency laws are aligned with those of US allies and will ask the Financial Stability Oversight Council – which monitors the stability of the US financial system – to study the problems of illicit financing.
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In addition, the command will explore the possibility of a new central bank digital currency. The Federal Reserve issued a document on the topic in January that explores the risks and benefits of US-backed digital currency.
Implicit in the order will be that cryptocurrency will remain a part of the US economy for years to come. The White House’s plans to move forward with the executive order were first reported by Bloomberg News.
While US officials have downplayed the importance of cryptocurrency to Russia’s ability to evade sanctions, it remains a concern.
“We will continue to review the operation of the sanctions and assess whether or not there are fluid leaks and we have the opportunity to address them. I hear about cryptocurrency often and it’s a channel to watch,” Treasury Secretary Janet Yellen said last week.
A senior administration official who spoke on condition of anonymity said the president’s national security team was already on the lookout for the use and creation of front companies and financial institutions. alternatives that Moscow could try to employ to circumvent the sanctions.
Crypto is one of many spaces the Biden administration is looking to shore up as it tries to ensure sanctions against Russia have maximum impact. The official said past experiences in Iran and Venezuela with circumventing sanctions inform the administration’s efforts. Additional export controls and new sanctions targets are also expected to be unveiled in the coming days and weeks to counter Russian sanctions evasion efforts, the official said.
On Monday, the Treasury Financial Crimes Network issued an alert advising financial institutions to be “vigilant” against any attempt to evade sanctions related to Russia’s war in Ukraine.
“While 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.
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