US President Joe Biden will sign an executive order regulating digital assets. Bloomberg writes about this with reference to informed sources.
The order contains provisions on how federal agencies should respond to changes in regulation, as well as exercise control over cryptocurrencies in the context of the impact on national security and the economy. They are expected to report on their digital asset regulation activities by the end of the year.
The development of the document has been underway since last year but has been accelerated in light of the sanctions and the possible use of cryptocurrencies to circumvent them. It is also being urged to be adopted as soon as possible by industry players who regularly express concern about the lack of legal certainty.
On the other hand, pressure is exerted by US lawmakers, including Senator Elizabeth Warren and US Senate Banking Committee Chairman Sherrod Brown. They are sure that Russia can resort to cryptocurrencies as a tool to circumvent sanctions. Analysts, however, doubt the feasibility of this scenario given the limited scope of the cryptocurrency market.
Also on March 7, the U.S. Treasury Department's Financial Crime Enforcement Network (FinCEN) urged financial institutions to pay special attention to virtual asset transactions that could be made to circumvent sanctions.
Read also: Biden Freezes FinCEN's Proposed Cryptocurrency Regulations
“It is critical that all financial institutions identify and promptly report any suspicious activity related to potential sanctions circumvention, as well as conduct risk-based customer due diligence or enhanced customer due diligence as needed,” says FinCEN, adding that so far does not observe high activity to circumvent sanctions with the help of cryptocurrencies. “While large-scale sanctions circumvention using cryptocurrencies by the authorities of a country such as the Russian Federation is not necessarily possible in practice, it is possible that they will be used by individual sanctioned individuals.”
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