The Biden administration has argued that Russia won’t be able to make up for the loss of US and European business by turning to cryptocurrency. Officials said the Democratic president’s order had been in the works for months before Russia’s Vladimir Putin invaded Ukraine last month.
Daleep Singh, a deputy national security and economic adviser to Biden, told CNN on Wednesday that “crypto’s really not a workaround for our sanctions.”
The executive order had been widely anticipated by the finance industry, crypto traders, speculators and lawmakers who have compared the cryptocurrency market to the Wild West.
Despite the risks, the government said, surveys show that roughly 16 per cent of adult Americans — or 40 million people — have invested in cryptocurrencies. And 43 per cent of men age 18-29 have put their money into cryptocurrency.
Coinbase Global, the largest cryptocurrency exchange in the United States, said the company had not seen a recent surge in sanctions evasion activity.
Treasury Secretary Janet Yellen said last week that “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions” and that the industry is not “completely one where things can be evaded.”
As for the Federal Reserve getting involved with digital assets, the central bank issued a paper in January that said a digital currency “would best serve the needs” of the country through a model in which banks or payment firms create accounts or digital wallets.
The US has joined other major economies around the world into investigating the feasibility of a digital currency.Credit:AP
Some participants in digital currency welcome the idea of more government involvement with crypto.
Adam Zarazinski, CEO of Inca Digital, a crypto data company that does work for several federal agencies, said the order presents the opportunity to provide “new approaches to finance.”
“The US has an interest in growing financial innovation,” Zarazinksi said. He added that China and Russia were looking at crypto and building their own currency. More than 100 countries have begun or are piloting their own digital sovereign currency, according to the White House.
Katherine Dowling, general counsel for Bitwise Asset Management, a cryptocurrency asset management firm, said an executive order that provides more legal clarity on government oversight would be “a long term positive for crypto.”
But Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies.
“As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.”
Hilary Allen, a financial regulation professor at American University
“I think crypto is a place where we should be putting the brakes on this innovation until it’s better understood,” she said. “As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.”
On Tuesday, the Treasury Department said its financial literacy arm would work to develop consumer-friendly materials to help people “make informed choices about digital assets.”
“History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system,” said Nellie Liang, undersecretary for domestic finance.
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Bitcoin and cryptocurrency related stocks got a boost Wednesday following Biden’s executive order.
The price of Bitcoin was up 9.8 per cent at $US42,211, according to Coindesk. Shares in cryptocurrency exchange Coinbase Global surged 9.3 per cent in midday trading, while online brokerage Robinhood Markets rose 4.5 per cent.
Riot Blockchain, which focuses on cryptocurrency mining, jumped 11.5 per cent. Digital payments platforms also rose. PayPal added 4.9 per cent and Block climbed 10.55 per cent.
AP
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Future of money: Biden orders study into crypto risks, US digital dollar
Source: Philippines Alive
