(Adds reference to SEC)
By Andrea Shalal
WASHINGTON, March 7 (Reuters) – U.S. President Joe Biden is expected to sign a long-awaited executive order this week directing the Justice Department, Treasury and other agencies to study the legal and economic ramifications of creating a a US central bank digital currency, a source familiar with the matter said on Monday.
Last year, the White House said it was considering widespread 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 a significant policy change in 180 days. This is a likely step towards the creation of a central bank digital currency,” the source said, citing the significant momentum behind such a move. within the Biden administration.
However, the commissioned reports could still raise concerns about such a move, or conclude that it would require congressional approval, the source warned.
The Biden order, which is expected to come on Wednesday, comes amid heightened concern over the use of cryptocurrencies by Russian elites to circumvent Western sanctions that have cut Russia off from much of the global economy. , and the steps taken by China and other economies to create their own cryptocurrencies.
The timing of the order was first reported by Bloomberg.
The Financial Crimes Enforcement Network (FinCEN) on Monday warned financial institutions to watch out for potential attempts by Russian entities to evade sanctions imposed by Washington following Moscow’s invasion of Ukraine.
Biden’s order will ask the Justice Department to consider whether new legislation is needed to create a new currency, along with the Treasury, Securities and Exchange Commission, Federal Trade Commission, Consumer Financial Protection Commission and others. agencies to study the impact on consumers.
The upcoming executive order could provide market regulators with more ammunition to place cryptocurrencies under their domain, analysts say.
The value of cryptocurrencies surpassed $3 trillion last year, with around 14% of Americans invested in digital assets as of 2021, according to research from the University of Chicago. This has caught the attention of financial regulators, particularly SEC Chairman Gary Gensler, who last year called the crypto industry the “wild west” of finance. Gensler told lawmakers he wants crypto exchanges to register with the SEC, just like traditional stock exchanges.
Commodity Futures Trading Commission Chairman Rostin Behnam also urged Congress to give his agency a leadership role in regulating digital assets.
Further studies will be commissioned on the impact of a cryptocurrency on competitiveness, the necessary market and technical infrastructure, and the environmental impact of bitcoin mining, the source said.
Last year, US Treasury Secretary Janet Yellen warned of an “explosion of risk” from digital markets, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequalities. (Reporting by Andrea Shalal in Washington Additional reporting by Hannah Lang and Katanga Johnson in Washington Editing by Jonathan Oatis)