Cryptocurrencies are becoming increasingly popular as a means of payment and store-of-value. However, President Biden’s recent plan to sign an executive order will provide federal agencies with guidance on how they should approach cryptocurrency transactions from both regulatory perspectives and national security concerns associated with these digital assets.
The U.S. federal government is looking into cryptocurrencies like never before. In January, reports of an order by several agencies sought to establish a central policy regarding digital currency and its risks/opportunities were floating around social media for some time now.
Relating Readings | Biden Prepares To Release Executive Report Outlining Crypto Risks
According to two information sources, the base for the crypto regulation had already been in progress since long before the Russian Ukraine war; however, most probably, the presidential order regarding crypto regulation is to be issued during this week.
Biden To Regulate Cryptocurrency To Enforce Russian Sanctions?
The White House has refused to comment on reports of an executive order that may attempt to address some cryptocurrency issues. However, mounting external pressures suggest this move could be in line with their efforts – primarily since analysts have raised concerns about how Russia uses cryptocurrencies as a way around international financial sanctions like those imposed by America and its allies following the invasion of Ukraine.
Industry executives have voiced concerns about the U.S. government’s unclear approach to regulating cryptocurrencies. The executive order is expected to assign specific roles for government agencies related to the regulation of crypto tokens and require those agencies to provide updated reports about their plans later in 2022.
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The U.S may finally answer one of the most pressing questions in crypto: will they create their own central bank digital currency? As countries worldwide launch these new CBDCs, it’s become increasingly urgent for America to join them or risk falling behind on innovation again.
The U.S Federal Reserve is currently studying the implications of a CBDC. Still, it’s unlikely that they will clarify their position on this topic for now as other studies are being conducted regarding cryptocurrency adoption and how best to preserve dollar dominance at home with international trade deals.
US Top Priority To Empower Imposed Sanctions
However, US regulatory authorities started working top priority after realizing the importance of cryptocurrency to empower imposed sanctions.
Janet Yellen, Treasury Secretary during the last week, 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.
Biden administration authorities are keen on strengthening the Russian sanctions to get the desired outcome. The crypto market is one of the prominent actors that could help Russia illude sanctions. The official hinted that authorities are trying to get proper plans based on the experience of sanctions imposed on Venezuela and Iran.
US Treasury’s Financial Crimes Enforcement Network published a warning to the financial institutions on Monday advising them to be “vigilant” for any activity of Russia to illude sanctions imposed due to war against Ukraine.
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