March 7th, 2022
Biden will reportedly be signing an executive order later this week which will outline the government’s strategy for cryptocurrencies, marking the first step towards the regulation of digital currency. This initiative, which has been in the works since last year, has been expedited in order to ensure Russia doesn’t try to use crypto to circumvent sanctions levied by the U.S. and its allies.
Detailed information on this order has not been released yet, but is anticipated to inform government agencies on what steps they must take to develop regulations on digital currencies. Federal agencies will also be required to report what they’re doing in terms of digital tokens later this year.
Bloomberg reports that the order “will direct federal agencies to examine potential regulatory changes, as well as the national security and economic impact of digital assets.”
Additionally, according to Decrypt,
“The executive order will reportedly help coordinate the role of agencies such as the Securities and Exchange Commission and Commodity Futures Trading Commission on cryptocurrency. Industry actors have long complained that guidance from the SEC and other agencies has been unhelpful as they seek to be compliant with U.S. law.”
Russia’s use of digital currency has raised significant concern that the country will use it to evade the recent sanctions which have crippled the ruble and closed the country’s stock market.
Last week, Treasury Secretary Janet Yellen discussed the possibility of cryptocurrency providing Russia a way of circumventing the sanctions placed on them. “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,” said Yellen. “I often hear cryptocurrency mentioned and that is a channel to be watched.”
In the past, action evasion via cryptocurrency has been experienced with Iran and Venezuela, which have helped inform the government’s efforts in this initiative.
The Acting Director of the Treasury’s Financial Crimes Enforcement Network (FinCEN), Him Das, issued a statement saying, “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.”
FinCEN issued an alert on Monday to financial institutions, advising them to be “vigilant against potential efforts to evade the expansive sanctions and other U.S.-imposed restrictions implemented in connection with the Russian Federation’s further invasion of Ukraine.”