A new bill requiring congressional notification before making US Department of State (DOS) reward payments using cryptocurrencies came to light as Congress raised concerns about sanctions evasion.
The Rewards for Justice Program, A counterterrorism rewards program run by the Secretary of State offers rewards for information that prevents international terrorism. Citing the examples of Russia and Belarus as previously sanctioned regimes that have used cryptocurrencies to circumvent sanctions, the bill HR 7338 requires that:
“The Secretary of State will notify the corresponding congressional committees no later than 15 days before paying a reward in cryptocurrency.”
The Congress highlighted the United Nations findings that 12 million Ukrainian residents would need humanitarian aid and that cryptocurrencies “have been used as an effective cross-border payment tool to send millions to the government, military, and Ukrainian refugees with limited access to financial services.”
The bill amendment requires the Secretary of State to submit reports to congressional committees explaining why the DOS made the decision to pay the rewards in cryptocurrency.
If signed into law, the bill will require the Defense Department to hand over a list of each of the cryptocurrency payments previously provided. In addition, the federal department will also have to provide evidence of why cryptocurrency payments would encourage whistleblowers to share information compared to the US dollar reward or other prizes.
In doing so, the DOS must show an analysis of how rewards paid in cryptocurrencies could undermine the dominance of the USD as the global reserve currency.
Following United States President Joe Biden’s executive order to ensure the responsible development of digital assets, federal agencies have come together to publish a fact sheet articulating a clear framework for the responsible development of digital assets.
The “first” fact sheet issued by the White House consisted of seven sections, namely: (1) Protecting Consumers, Investors, and Businesses; (2) Promote access to safe and affordable financial services; (3) Promote financial stability; (4) Promote responsible innovation; (5) Strengthen our global financial leadership and competitiveness; (6) Fight Illicit Funding and (7) Explore a US Central Bank Digital Currency (CBDC).
Although some of the sections do not contain particularly new information, the federal agencies recommend creating a federal framework for non-bank payment providers, as well as encouraging the adoption of instant payment systems such as FedNow, which is scheduled to launch in 2023.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.