Bloomberg: Sources say Biden will sign executive order on cryptocurrency this week

U.S. President Joe Biden is expected to sign a long-awaited executive order this week directing the Justice Department, Treasury Department and other agencies to study the legal and economic implications of creating a U.S. central bank digital currency, a source familiar with the matter said on Monday.

The White House said last year it was considering broad oversight of cryptocurrency markets, including an executive order, to counter the growing threat of ransomware and other cybercrime.

Biden’s order sets a 180-day deadline for a series of reports on the “future of money” and the role cryptocurrencies will play in that changing environment.

"We could see a significant shift in policy within 180 days. It could be a step toward creating a central bank digital currency," the source said, citing significant momentum within the Biden administration in support of such a move.

However, the source warned that the report being prepared could still raise concerns about the move, which would require congressional approval.

Biden’s order, which could come on Wednesday, comes amid heightened concerns that Russia’s elite are using cryptocurrencies to circumvent Western sanctions that have cut Russia off from much of the global economy, while China and other economies are working to create their own cryptocurrencies.

Bloomberg first reported the timing of the order.

The Financial Crimes Enforcement Network (FinCEN) on Monday warned financial institutions to be aware of possible attempts by Russian entities to evade sanctions imposed by Washington over Moscow's incursion into Ukraine.

Biden's order would require the Justice Department to study whether new laws are needed to create a new currency, and the Federal Trade Commission, the Consumer Financial Protection Commission and other agencies to study the impact on consumers.

The sources also said the Biden administration will conduct additional research on the impact of cryptocurrencies on competitiveness, the required market and technological infrastructure, and the environmental impact of Bitcoin mining.

U.S. Treasury Secretary Janet Yellen warned last year that digital markets posed huge risks, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequality.