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Biden set to issue sweeping order on regulating crypto

The long-awaited measure comes as the Russian invasion of Ukraine raises new questions about the asset class

President Biden waves as he departs the White House last week. (Evelyn Hockstein/Reuters)

President Biden is set to sign an executive order this week ordering a sweeping review of the federal government’s approach to cryptocurrencies, according to two people briefed on the matter.

The measure, in the works for months, aims to impose some structure on what has been a fractured response from various regulators to the rise of digital assets.

It comes as the Russian invasion of Ukraine has sharpened Washington’s focus on both the promise and peril of the technology. The Ukrainian government and affiliated causes have collected tens of millions of dollars in cryptocurrency donations since the conflict began. Meanwhile, some U.S. policymakers have raised concerns about the potential for Russians to use crypto to dodge sanctions, though others say the relatively small size of the asset market and the traceability of digital tokens make it an unworkable option for targeted Russians.

Biden’s order will ask for a report on the opportunities crypto presents for illicit financial transactions and what steps the federal government should take to address them, said the people, speaking on the condition of anonymity because they were not authorized to speak about the matter publicly.

The measure will also ask a number of agencies to produce an analysis on whether it makes sense for the Federal Reserve to launch a central bank digital currency, a sort of digital dollar that other nations, including Russia and China, are exploring.

The order tasks the Treasury Department with coordinating a review of any financial stability threats posed by digital assets. It mandates a separate look into environmental concerns raised by the energy required to produce some digital coins. And it requires the State Department to report on how the federal government should coordinate with foreign counterparts to regulate cryptocurrencies.

The report, highly anticipated by crypto advocates, is neutral on the asset class as a whole. But it sends a signal that the administration believes crypto has proved itself an economic force that will continue to grow rapidly and that policymakers need to reckon with, one person briefed on the order said.

News that Biden is set to sign the measure in the coming days was first reported by Bloomberg News.

Jeff Stein contributed to this report.