President Joe Biden on Wednesday signed an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should jump in and create its own digital currency.
The Biden administration views the explosive popularity of cryptocurrency as an opportunity to examine the risks and benefits of digital assets, said a senior administration official who previewed the order Tuesday on the condition of anonymity, terms set by the White House. Under the executive order, Biden also has directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security.
Brian Deese and Jake Sullivan, Biden’s top economic and national security advisers, respectively, said the order establishes the first comprehensive federal digital assets strategy for the United States. “That will help position the U.S. to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values and advances U.S. global competitiveness,” Deese and Sullivan said Wednesday in a joint statement.
The action comes as lawmakers and administration officials are increasingly voicing concern that Russia may be using cryptocurrency to avoid the impact of sanctions imposed on its banks, oligarchs and oil industry due to the invasion of Ukraine. Last week, Democratic Sens. Elizabeth Warren, Mark Warner, and Jack Reed asked the Treasury Department to provide information on how it intends to inhibit cryptocurrency use for sanctions evasion. The Biden administration has argued that Russia won’t be able to make up for the loss of U.S. 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.
