Biden signs cryptocurrency order to examine risks as popularity rises

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.

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 Senators 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 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.

Coinbase Global Inc, the largest cryptocurrency exchange in the United States, said the company had not seen a recent surge in sanctions evasion activity.

Some participants in digital currency welcome the idea of more government involvement with crypto.

But Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies.