In Response To The Use Of Cryptocurrencies In Russia, Joe Biden Will Order The Creation Of Regulations On Digital Currencies

US President Joe Biden immediately ordered the creation of regulations on digital currencies. (photo: twitter @potus)

JAKARTA - US President Joe Biden is expected to sign a long-awaited executive order this week. The order, issued by the supreme leader in the US, Monday, March 7, will direct the Department of Justice, Treasury, and other agencies to study the legal and economic consequences of creating the US central bank's digital currency.

The White House last year said it was considering broad scrutiny of the cryptocurrency market - including executive orders - to deal with 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 change in policy within 180 days. This is likely a step towards the creation of a central bank digital currency", a source told Reuters citing significant momentum behind the Biden administration's move.

But the report said the order could still raise concerns about further steps, or conclude that it would require congressional approval.

Biden's order, likely to be issued on Wednesday, March 9, comes amid growing concerns about the Russian elite's use of cryptocurrencies to evade Western sanctions, which have cut Russia from much of the global economy. It even raises other concerns that China and other economies have followed suit to create their own economies with cryptocurrencies.

The Financial Crimes Enforcement Network (FinCEN) on Monday also warned financial institutions to be wary of potential attempts by Russian entities to evade sanctions imposed by Washington over Moscow's invasion of Ukraine.

Biden's order will ask the Justice Department to see if new legislation is needed to create a new currency, with the Federal Trade Commission, the Consumer Financial Protection Commission, and other agencies to study the impact on consumers.

Another study will be ordered on the impact of cryptocurrencies on competitiveness, the market and required technical infrastructure, and the environmental impact of bitcoin mining, the source said.

US Treasury Secretary, Janet Yellen, last year warned about the "explosion of risks" of digital markets, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequality.