Joe Biden is set to sign an executive order that will begin the process of regulating the trading of cryptocurrency, as crypto becomes a viable alternative for Russians seeking to avoid the impact of economic sanctions.
According to ABC News, at least two anonymous Biden Administration officials said that the order will be issued this week, and has allegedly been in the planning stage since before the Russian invasion of Ukraine in late February. The order will outline the various steps that government agencies, including the Treasury Department, are to take to begin the process of imposing regulations on the buying and selling of digital currencies.
The order will also feature a request from the State Department that makes sure American cryptocurrency laws parallel similar laws already put in place by various U.S. allies, and will task the Financial Stability Oversight Council with studying illicit finance concerns. Lastly, the order will allegedly open up the possibility of a new central bank for digital currency, after the Federal Reserve previously released a study in January that highlighted the possible risks and rewards of a digital currency that is backed by the United States.
The move comes as the United States and its allies continue exerting economic pressure on the Russian government after the country began its invasion of Ukraine on February 24th. As a result of the many sanctions that have begun to cut off Russian trade with most of the rest of the world, some Russian investors have turned to unregulated cryptocurrency as a means for keeping their money safe in an investment that cannot be controlled by the United States government. As a result, the prices of several major cryptocurrencies, including Bitcoin and Ethereum, rose significantly over the course of just several days.
Last week, Treasury Secretary and former Federal Reserve chairwoman Janet Yellen said that “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.” On the matter of crypto, Yellen said she “often hear[s] cryptocurrency mentioned and that is a channel to be watched.”
Himamauli Das, Acting Director of the Treasury Department’s Financial Crimes Enforcement Network (FCEN) said on Monday that “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.”