WASHINGTON (AP) โ President Joe Biden is expected to sign an executive order on cryptocurrencies this week that will mark the first step toward regulating how digital currencies are traded.
The move comes as administration officials have raised concerns in recent weeks about Russia's use of cryptocurrencies to evade the impact of crushing sanctions in response to its invasion of Ukraine. The sanctions have pushed the ruble to record lows and shut down the country's stock market.
Two people familiar with the process said the cryptocurrency executive order was expected to be issued this week and had been in the works long before the war. Both people 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 oversees the stability of the system. US financier, to study illicit financial concerns.
In addition, the order will explore the possibility of a new central bank digital currency. The Federal Reserve issued a paper on the topic in January exploring the risks and benefits of the 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 cryptocurrencies to Russia's ability to evade sanctions, it remains a concern.
โWe will continue to see how the sanctions work and assess whether or not there are liquid leaks and we have the possibility of addressing them. I often hear cryptocurrency mentioned and that is a channel to watch,โ Treasury Secretary Janet Yellen said last week.
A senior administration official who spoke on condition of anonymity said the president's national security team has already been on the lookout for the use and creation of shell companies and alternative financial institutions that Moscow could try to employ to circumvent sanctions.
Crypto is one of several spaces the Biden administration is looking to shore up as it tries to ensure sanctions on Russia have maximum impact. The official said past experiences in Iran and Venezuela with sanctions evasion are informing 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 Russia's sanctions evasion efforts, the official said.
On Monday, the Treasury Financial Crimes Enforcement Network issued an alert advising financial institutions to be "vigilant" against any attempt to evade sanctions in connection with Russia's war in Ukraine.
โAlthough we have not seen widespread evasion of our sanctions using methods such as cryptocurrencies, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,โ Acting Director Him Das said in a statement.
