Reports suggest a new Biden executive order could intensify the White House’s approach to non-traditional finance, adding to signs of an impending crackdown on cryptocurrency by the US government. President Biden had previously stated his intention to bring together 30 countries worldwide to combat “cyber threats,” including potential crypto misuse.
Biden highlighted possible issues like attacks against critical infrastructure and ransomware as key points of concern in a statement commemorating Cybersecurity Awareness Month. “This month, the United States will bring together 30 countries to improve law enforcement collaboration, stem the illicit use of cryptocurrency, and engage diplomatically on these issues,” the President said.
Meanwhile, according to a report published today, the President is considering stepping up his response to rising crypto usage at home. Bloomberg reports that new executive order is in the works, instructing “federal agencies to study and offer recommendations on relevant areas of crypto,” according to sources familiar with the proposal.
It is stated that this includes financial regulation, national security, and economic innovation. The order hasn’t been finalized yet, and details could change before anything is announced.
Still, it’s unsurprising that the government is so concerned about cryptocurrency right now. Alternative currencies have received a wide range of reactions worldwide, from outright suspicion and crypto mining bans in China to countries like El Salvador adopting bitcoin as a parallel legal tender. Although the US dollar will continue to be used in El Salvador, bitcoin will be accepted alongside it. The country intends to mine coins using volcanic energy, which is controversial.
Meanwhile, the European Central Bank confirmed earlier this year that it was looking into the possibility of creating its own “digital euro” currency. The ECB stated that the cross-border virtual coin would be based on a direct claim on the central bank itself in an attempt to reassure users that the market’s bottom would not fall out unexpectedly.
Along with the potential for cryptocurrency like bitcoin, ethereum, and more unusual coins like doge to be used illegally in the United States, another point of interest has been ensuring that those trading or using cryptocurrency aren’t doing so to avoid tax liabilities. The US Treasury proposed new rules about crypto transactions in 2020, requiring transfers of $10,000 or more to be reported to the IRS.
The Treasury suggested at the time that “cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.” It came after the IRS reminded taxpayers in 2019 that gains in digital currencies like bitcoin count as income and must be reported on a tax return.
Source: Bloomberg
