Biden orders studies on cryptocurrency regulation and issuance -source

Illustration shows representations of the cryptocurrency Bitcoin and US dollars
A representation of the cryptocurrency Bitcoin placed on top of U.S. dollars in this illustration taken January 24, 2022. REUTERS/Dado Ruvic/Illustration

March 8, 2022

By Andrea Schalal

WASHINGTON (Reuters) – U.S. President Joe Biden is expected to sign a long-awaited executive order this week directing the Justice Department, Treasury Department and other agencies to study the legal and economic implications of creating a U.S. Federal Reserve digital currency, a source said , with which she is familiar with the matter said on Monday.

The White House said last year it was considering wide-ranging oversight of the cryptocurrency market — including an executive order — to address the growing threat of ransomware and other cybercrimes.

Biden’s order sets a 180-day deadline for a series of reports on the “future of money” and the role cryptocurrencies will play in the evolving landscape.

“We could see significant policy change in 180 days. This is a likely move towards creating a central bank digital currency,” the source said, citing the significant momentum behind such a move within the Biden administration.

However, the requested reports could still raise concerns about such a move or conclude that Congressional approval would be required, the source warned.

The Biden order, which is likely to be issued on Wednesday, comes amid heightened concerns about the use of cryptocurrencies by Russian elites to circumvent Western sanctions that have cut Russia off from much of the world economy, and spurring China and other economies to make their own to create cryptocurrencies.

The timing of the order was first reported by Bloomberg.

The Financial Crimes Enforcement Network (FinCEN) on Monday warned financial institutions to be on the lookout for potential attempts by Russian companies to circumvent Washington-imposed sanctions over Moscow’s invasion of Ukraine.

Biden’s order is asking the Justice Department to consider whether new legislation to create a new currency is needed, with the Federal Trade Commission, Consumer Financial Protection Commission and other agencies examining the implications for consumers.

Further studies will be commissioned on the impact of a cryptocurrency on the competitiveness, market and required technical infrastructure, as well as the environmental impact of bitcoin mining, the source said.

US Treasury Secretary Janet Yellen last year warned of a “risk explosion” from digital markets, including cryptocurrency abuse, but said new financial technologies could also help fight crime and reduce inequality.

(Reporting by Andrea Shalal; Editing by Jonathan Oatis) Biden orders studies on cryptocurrency regulation and issuance -source

Emma Bowman

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