Biden Expected to Sign Crypto Order this Week as Cryptocurrencies Attract Scrutiny
According to several folks who allegedly know the administration’s plans, United States President Joe Biden is expected to sign an executive order within the week. the order will outline the U.S. government’s strategy for crypto. It will also touch on national security and the broader economic impacts of cryptocurrencies.
What the Executive Order Holds
So far, White House officials have refused to comment on the cryptocurrency executive order.
Earlier in January, there were reports that a possible order would enact a central policy regarding cryptocurrencies. In that period, federal agencies seemed to be looking into the risks and opportunities of digital currencies.
Following that, the Office of the Comptroller of the Currency (OCC), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) released advice letters, informal statements, and public rule-making initiatives. They were intended to dictate how various components of the cryptocurrency sector should comply with federal law. These efforts, however, were not coordinated in a single document or by a single agency.
However, the executive order may address some issues specifically in light of mounting external pressures. Recently, the White House’s approach to crypto has attracted attention after sanctions were imposed on Russia by the U.S. and its allies. Thus, raising concerns that organizations and individuals could use crypto to evade the restrictions.
Industry executives have also expressed worries about what they believe to be a lack of transparency in the U.S. government’s approach to crypto regulation. The executive order is expected to start assigning duties for government agencies involved in crypto token regulation. It is also anticipated that those agencies will be required to produce updated reports on their intentions later in 2022.
The Possibility of CBDC
The executive order sign expected may address a pressing question in the crypto world; will the U.S. issue its CBDC? Over the past year, many countries have gone ahead and dived into digital assets by launching CBDCs. Hence, creating urgency and a push for other countries to join in the space.
In January of 2022, the central bank released a paper stating that a United States CBDC would help preserve the dollar’s dominance. It said this about countries like China that already embraced digital assets into their system.
However, there is a possibility that the executive order will not clarify this CBDC issue for now. It can be attributed to the U.S. Federal Reserve is still trying to understand and research the implications the move would have on a larger scale.
Crypto is Attracting Scrutiny
Cryptocurrencies such as bitcoin have grown in popularity, especially as payment for products. Web3 has also gained traction as the proposed future version of the internet. However, official scrutiny intensifies as more money floods into the so-far unregulated currencies.
The US Justice Department announced the launch of a National Cryptocurrency Enforcement Team on February 17th. Its purpose is to keep an eye on blockchains, the underlying technology that powers cryptocurrencies, for any ill-gotten gains. It collaborates with various organizations, including the FBI’s recently formed Virtual Asset Exploitation Unit, which is likewise focused on cryptocurrencies.
Cryptocurrencies are also under fire from legislators, notably Senator Elizabeth Warren and Senate Banking Committee Chairman Sherrod Brown. They are concerned that folks might use digital assets to circumvent sanctions. However, several experts and regulators have questioned how successful workaround crypto might be given the market’s small size.
On Monday, Him Das, acting director of the Treasury’s Financial Crimes Enforcement Network, addressed the issue.
“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,” he said in a news release.
