There is a new bill in the works that demand a congressional notification to be made before cryptocurrencies are used to pay United States Department of State rewards.
This is because Congress has become increasingly concerned about the use of cryptocurrencies for the evasion of sanctions.
The Secretary of State runs a counterterrorism rewards program that has been named the Rewards for Justice Program.
It gives rewards in exchange for information that can be useful in preventing international terrorism. The new bill wants to ensure that the program cannot be used for evading sanctions.
It cited examples of Belarus and Russia which are sanctioned regimes and have circumvented the sanctions with the use of cryptocurrencies.
Therefore, the amendment dictates that the appropriate congressional committees be notified by the Secretary of State in 15 days before they give rewards in the form of crypto.
The findings of the United Nations showed that humanitarian assistance would be needed by 12 million Ukrainians and these were highlighted by Congress.
It was also stated that crypto has turned out to be an effective tool for making cross-border payments in millions to the Ukrainian army, government as well as refugees who have had their access to financial services limited.
The amendment of the bill indicates that the Secretary of State would have to provide congressional committees with reports explaining the decision of the State Department to pay out rewards in the form of cryptocurrency.
If the said bill is signed into law, the State Department would be obligated to list every single crypto payment that has been made previously.
In addition, the federal department would also have to give evidence to explain how they can encourage whistleblowers to share intel with crypto payments, as compared to giving rewards in US dollars, or other prizes.
In order to do so, an analysis would have to be provided by the State Department of how the status of the US dollar as the global reserve currency could be undermined through crypto rewards.
The White House
An executive order had been issued by President Joe Biden for responsible digital asset development and federal agencies had come together for developing a fact sheet.
This was aimed at developing a clear framework for the development of digital assets. The White House published the fact sheet and it comprised seven different sections.
These sections covered different areas, such as consumer protection, financial stability, preventing illicit financial activities, ensuring innovation, provision of affordable and safe financial services, ensuring competition and the idea of central bank digital currency (CBDC).
While there may not be new information included in some of the sections, there are others that do have some interesting updates.
Federal agencies have recommended that a federal framework be developed for nonbank payment providers.
Moreover, they have also said that they should also encourage people to use instant payment systems like FedNow, which is expected to be launched in the next year.