President Biden to Sign Executive Order on Cryptocurrencies this Week

US President Joe Biden will soon sign an executive order on cryptocurrency regulation and oversight that’s been in the works since last year.

Sorting Out Responsibilities

Sources involved in the order’s deliberations – who opted to remain anonymous – offered details on the order to Bloomberg. As reported in October, it will direct federal agencies to examine the “national security” and “economic “impact” of cryptocurrencies. Later in the year, those agencies will have to report their findings.

The order should theoretically organize research and regulatory responsibilities in the landscape around digital assets. The novel nature of the asset class has left certain bodies at odds with one another at how to classify or tackle the space.

For example, Securities and Exchange Commission Chairman Gary Gensler has admitted that some cryptos share elements of both securities and commodities. Therefore, they have left overlapping responsibility between both his agency and the Commodity and Futures Trading Commission.

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Bitcoin supportive US Senator Cynthia Lummis commented over Twitter that “lots and lots of agency studies” will come from the upcoming order. The directive will also allegedly address the potential for a US issued central bank digital currency (CBDC). However, no firm position is expected to be adopted on the matter, as the Federal Reserve is still researching it.

Agencies affected in the order this week will include the State Department, Commerce Department, and others.

The Matter of Sanctions

Regarding national security, the White House is under more pressure to address concerns of Russia using cryptocurrencies to evade sanctions. We do not have confirmation yet that the country is using Bitcoin for this purpose. However, the network’s peer-to-peer and censorship-resistant nature makes some believe the opportunity is open. Famous politicians worried about this use-case include senator Elizabeth Warren and Senate Banking Committee Chairman Sherrod Brown.

Going by public knowledge, however, crypto has assisted Ukraine more than Russia in their conflict so far. While Ukrainians receive military support from across the world in crypto, some exchanges are busy with banning Russian accounts and addresses.

Though no one can stop crypto transactions, the people’s access to centralized exchanges certainly can be. For instance, exchanges could easily prevent Russia from converting its Bitcoin into fiat currency. This would be possible when necessary and especially when regarding private manners.

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Furthermore, some analysts think that the crypto’s market cap and trade volume is insufficient for absorbing high value investments from Russia’s government now.