WASHINGTON, DC -- Today, after President Biden signed an executive order directing federal agencies to consider additional regulations for cryptocurrencies, create standards for overseeing digital assets, and study the impact of cryptocurrencies on financial stability and national security, U.S. Senator Jack Reed (D-RI), a senior member of the Banking, Housing, and Urban Affairs Committee, and the Chairman of the Senate Armed Services Committee, praised the move. 

Reed says the federal government must be proactive and forward-looking when it comes to financial innovation and countering strategic adversaries, he notes this executive order will help ensure the U.S. has a stronger understanding of challenges, opportunities, and vulnerabilities that exist when it comes to crypto and digital assets.

In the wake of Vladimir Putin’s unprovoked invasion of Ukraine, the effectiveness of Russian sanctions demonstrates the national security benefits of maintaining U.S. dollar primacy in cross-border payments.  A U.S. central bank digital currency is crucial to preserving that primacy, especially as other nations move forward with launching and developing their own digital currencies.

Last week, Senator Reed joined several colleagues in seeking information from the U.S. Treasury Department about how it intends to inhibit cryptocurrency use for sanctions evasion by Putin’s inner circle and other bad actors.

Today, Senator Reed issued the following statement:

“Digital assets are becoming more interconnected with the traditional financial system and the broader economy.  We need more research and information to protect consumers, investors, and businesses from the risks posed by the dramatic growth in digital asset markets.  All participants in these markets deserve clear rules of the road.

“Some of the features that make digital assets attractive to would-be users – anonymity and independence from traditional finance – also make it alluring for criminals and illicit use.  The federal government must continue working at home and abroad to develop effective regulation, supervision, and enforcement measures to detect and thwart money laundering schemes and sanctions evasion.

“It is critical to national and economic security that the U.S. maintain monetary hegemony into the future.  As we are seeing in Russia, the power of the U.S. dollar is a powerful economic and diplomatic tool for influencing other countries without resorting to military conflict.  A U.S. central bank digital currency (CBDC) that is interoperable with other central banks’ CBDCs can help preserve the dollar’s dominant role in global finance.”