- An unplanned announcement
- Waiting for the next move of Biden’s administration
- U.S. politicians have not reached consensus as to whether crypto should be banned
- Standing up for their beliefs or playing the game of politics?
- Russia is not going to rely on crypto to evade sanctions
On March 9, the price of Bitcoin started growing. It happened after an accidental publication of a United States Treasury announcement. By the time the article was published, the passions subsided and the course returned to its previous level.
In a press-release that was published on the United States Treasury website and later deleted, Treasure Secretary Janet Yellen said that President Biden’s new cryptocurrency order called for “a coordinated and comprehensive approach to digital asset policy”. She added that this order would contribute to responsible innovation. An archived version of the press-release is available at CoinDesk.
It is expected that this week Joe Biden will sign an order to require U.S. government departments study the legal and economic consequences of creating a national digital currency. Recently, the White House was considering complete monitoring of the cryptocurrency market in order to minimize risks related to cybercrime.
The new announcement might indicate that the American authorities are not willing to impose strict regulation of the market at this moment. Matthew Dibb, COO and co-founder of Singapore-based cryptocurrency platform Stack Funds, has said that it will contribute to another surge of the crypto market.
Senator Elizabeth Warren, who is a known opponent of banking and crypto, once again advocates for eradication of digital assets. She is working on a legislative proposal. According to the Senator, new measures could make it harder for Russia to evade U.S. sanctions by using crypto.
The Senator’s proposal draft intends to introduce secondary sanctions on foreign cryptocurrency exchanges that have not supported U.S. sanctions. The aim is to present such companies with a challenge and make them choose between operating in the United States and cooperating with sanctioned entities and individuals.
U.S. crypto sanctions may lead to a situation in which Americans will not have access to international exchanges. However, many exchanges have already started to introduce restrictions for American users due to regulatory difficulties.
It seems that, fueled by the hatred towards Russia, some American politicians have decided to play the patriotism card and elevate their status. Last week, Elizabeth Warren alongside with several other Senators, asked Janet Yellen to introduce additional crypto-related measures.
“Strong enforcement of sanctions compliance in the cryptocurrency industry is critical given that digital assets, which allow entities to bypass the traditional financial system, may increasingly be used as a tool for sanctions evasion.”
Last week, Senator Lindsey Graham supported the idea of a crypto “crackdown”, saying that “cryptocurrency is rearing its ugly head.” He added, “As you sanction the central bank, which is a good thing, I worry about how the Russians could use the cryptocurrency to stay afloat.”The proposed bill should also contribute to identity verification for transactions between private wallet owners. If this measure is introduced, crypto organizations would have to maintain comprehensive records and provide them to the Treasury.
Such strategy might turn out to be a bit over-the-top as the Financial Crimes Enforcement Network (FinCEN), of the United States Department of the Treasury has stated the following: “Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people.”
Most experts have stated and agreed that Kremlin is not going to turn to crypto for the purposes of evading financial sanctions. Cryptocurrency markets simply do not have enough liquidity to cover the country’s large forex markets. Also, the volatility of crypto is not conducive to the use of digital assets as legal tender.
Moreover, Russia has great reserves of gold and foreign exchange in yuan. The country has established strong ties with China and might use this position to mitigate the impact of Western sanctions. Maybe, American senators should consider this instead of cracking down on crypto.