President Biden will likely sign an executive order this week regarding how cryptocurrency is traded and regulated by the government. The order comes on the heels of rumors that Russia is using cryptocurrency to evade economic sanctions. Since its evasion of Ukraine began, Russia has experienced sharp drops in the price of its currency, the ruble, which led to a temporary shuttering of the country’s stock market.
At a glance
- President Biden’s administration wants to better monitor cryptocurrency transactions moving forward
- They will use the threat of Russian sanction-evasion to implement general oversight policies
- Cryptocurrency exists on the blockchain, which means it is fully public but completely beyond manipulation, like a traditional fiat currency
Sources inside the White House say that the government devised the order long-before the war, the New York Post reports. All sources also spoke to national media under strict anonymity, though, as well.
The order is expected to outline new Treasury Department policies and procedures needed to regulate digital currencies. Currently, digital currencies exist fully independent of all regulation, thanks to the impenetrable escrow network called the blockchain. Governments desperately want to be able to manipulate cryptocurrencies like they do their own fiat currencies, but so far they haven’t been able to devise any real leverage over the blockchain. And they never will — which is the beauty of the blockchain — but they will try ’til the bitter end; that much is certain.
The Biden administration’s executive order on cryptocurrency will be justified as an anti-war effort
The executive order will also loop in the State Department to ensure any new laws align with international allies. It will also direct Financial Stability Oversight Council to study illicit finance concerns.
Most interestingly, the order will explore the possibility of creating a U.S.-backed digital currency. This move implies that the government has finally, formally acknowledged the intrinsic power of cryptocurrency; and understands that it is here to stay.
“We will continue to look at how the sanctions work. And then 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 watch,” Treasury Secretary Janet Yellen said last week regarding cryptocurrencies in Russia.
Crypto is one of several avenues that the Biden administration wants to tighten up as it makes certain that economic sanctions on Russia have maximum impact. One anonymous official said past experiences in Iran and Venezuela, specifically sanction evasion techniques, are helping guide the process. The official also said to expect new sanction targets and export controls in the coming weeks.
On Monday, the Treasury’s Financial Crimes Enforcement Network reminded financial institutions to act “vigilantly” against all efforts to evade sanctions in connection with Russia’s war in Ukraine.
“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,” acting Director Him Das said in a statement.