United States President Joe Biden is expected to sign an executive order this week that will direct the Justice Department, Treasury, and other agencies to study the legal and economic effects of creating a U.S. central bank digital currency.
Last year, the White House said that the federal government was considering a wide-ranging oversight of the cryptocurrency market in the United States. This included the possibility of an executive order that would deal with the growing threat of ransomware and other cybercrime.
Biden's Executive Order on Crypto
The Democratic president's order will give a 180-day deadline for a series of reports on the "future of money" and the role that cryptocurrencies will have in the ever-evolving landscape. A source, citing significant momentum behind a move by the Biden administration, said there would be a significant shift in policy within the 180 days that would be a step towards creating a digital currency central bank.
However, the reports that Biden will order could cause concerns about such a move and could require congressional approval. The president's order, which could come as early as Wednesday, also comes amid increasing tensions of the use of cryptocurrencies by Russian elites to avoid Western sanctions, as per Reuters.
In a statement last month, Commodity Futures Trading Commission (CFTC) chair Rostin Behnam told a Senate committee hearing that his agency wanted to be in charge of regulating the crypto spot market. During that hearing, the official answered questions of whether a lead agency for the regulation of crypto should be established.
Benham said that on top of his agency being responsible for the regulation of digital currency, the Securities and Exchange Commission (SEC) should also be part of the process. The director of training and regulatory affairs at Blockchain Intelligence Group, Michael Fasanello, speculated that a new individual would gain oversight powers over multiple partner agencies.
According to Blockworks, the agencies include the CFTC, SEC, the Financial Crimes Enforcement Network, and the Office of the Comptroller, Fasanello said. The situation comes as some, including SEC Commissioner Hester Pierce, said that having a new regulator to what he considered an already "fragmented regulatory system" should not be a top priority.
Regulating Digital Currency
Biden's order is believed to include instructions such as a request for the State Department to ensure that American cryptocurrency laws are aligned with those of the country's allies. The Democrat would also order the Financial Stability Oversight Council to study illicit finance concerns.
In January, the Federal Reserve issued a paper on the topic of a new central bank digital currency that analyzed the risk and benefits of U.S.-backed digital currency. On the other hand, the order implies that cryptocurrency will remain a part of the U.S. economy for years in the future.
While many government officials have downplayed the threat of Russia using cryptocurrency to circumvent sanctions on its banks, the issue remains to be a concern. Last week, Treasury Secretary Janet Yellen said that officials will continue to monitor how the sanctions work and evaluate whether or not there are liquid leakages and the possibility of addressing them, the Associated Press reported.
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