The addition to the law requires the Secretary of State to explain to congressional committees why the State Department decided to pay out incentives in cryptocurrencies.
As Congress increases worries about the evasion of sanctions, a new measure has been introduced requiring notice to Congress prior to the payment of United States Department of State incentives using cryptocurrency.
program administered by the Secretary of State pays rewards for information that aids in the prevention of international terrorism. H.R. 7338 requires, citing Russia and Belarus as previously sanctioned countries that have employed cryptocurrency to bypass sanctions.
“The Secretary of State must inform the relevant legislative committees at least 15 days prior to distributing an award in bitcoin.”
Congress highlighted the United Nations conclusion that 12 million Ukrainians would require humanitarian aid and that cryptocurrencies have been “utilized as an effective cross-border payment tool to send millions to the Ukrainian Government, Ukrainian army, and Ukrainian refugees with limited access to financial services.”
The addition to the law requires the Secretary of State to explain to congressional committees why the State Department decided to pay out incentives in cryptocurrencies.
The measure would oblige the State Department to compile a record of all prior crypto payments. In addition, the federal agency would be required to prove why cryptocurrency rewards will motivate whistleblowers to disclose sensitive information as opposed to U.S. cash or other awards.
In doing so, the State Department must examine how crypto awards potentially threaten the dollar’s status as the world’s reserve currency.
Following U.S. President Joe Biden’s executive order on Ensuring Responsible Production of Digital Assets, government agencies collaborated to issue a fact sheet outlining a clear framework for the development of responsible digital assets.
The “first-ever” White House fact sheet included seven sections: (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Combating Illicit Finance; and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).
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