United States President Joe Biden will sign an executive order this week directing his administration to evaluate the creation of a US cryptocurrency.
Biden’s measure will be aimed to instruct the Treasury, Commerce, State and Justice departments, among other agencies, to study the technical requirements that would be necessary to create an official US digital currency, which, like the dollar, would be backed by the Federal Reserve. Biden will also ask the Treasury Department to examine potential risks posed by cryptocurrencies to financial stability or national security, including through illicit finance.
The order, which will be formally announced sometime this week, will give US agencies three to six months to prepare recommendations on the cryptocurrency market. They will also look at how other countries handle digital payment systems and what effect they may have on economic competitiveness, as well as the environmental impact of mining cryptocurrencies.
Since the launch of Bitcoin 13 years ago the US government has been unclear about how to regulate its use and has so far failed to devise comprehensive regulations. The United States has, however, criticised the adoption of Bitcoin as legal tender in El Salvador: last week, the State Department warned in a report that it complicates the fight against money laundering and terrorist financing in the country.
The release of the executive order, under which the White House will ask different government offices to issue reports with the goal of releasing legislation in a few months, comes at a time when administration officials have expressed concern about Russia’s use of cryptocurrencies to evade the impact of sanctions in response to its attack on Ukraine. The sanctions have driven the ruble to record lows and shut down the country’s stock market.
Other regulatory steps have been taken in the US. The Virginia Senate approved a request to amend a bill that will allow traditional banks in the state to provide custodial services for cryptocurrencies. This bill was passed unanimously by the Senate with a staggering 39-0 vote.
In addition, Wyoming recently introduced legislation for a state-issued stablecoin and Canadian entrepreneur Kevin O’Leary has revealed that some US lawmakers are working on a policy to open up cryptocurrency markets.