A new bill that would require notification to Congress before using cryptocurrencies to pay U.S. State Department (DOS) rewards has surfaced amid concerns over sanctions evasion in the U.S. Congress.
The Justice Rewards Program is a counterterrorism rewards program administered by the Secretary of State that rewards information for preventing international terrorism. Citing Russia and Belarus as examples of previous sanctions regimes using cryptocurrencies to evade sanctions, bill HR 7338 requires:
“The Secretary of State shall notify the appropriate congressional committee no later than 15 days before payment of a cryptocurrency reward.”
Congress highlighted UN 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 digital data to the Ukrainian government, the Ukrainian military, and Ukrainian refugees with limited access to financial services. Millions of dollars. Services.”
The amendment to the bill requires the secretary of state to submit a report to a congressional committee explaining why DOS decided to pay the reward in cryptocurrency.
If signed into law, the bill would require DOS to list every previously offered crypto payment. In addition, federal departments will need to provide evidence as to why cryptocurrency payments would encourage whistleblowers to share intelligence compared to using dollars or other prize rewards.
In doing so, DOS must present an analysis of how crypto rewards are undermining the dominance of the U.S. dollar as the global reserve currency.
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Following U.S. President Joe Biden’s executive order on ensuring the responsible development of digital assets, federal agencies have teamed up to release a fact sheet to articulate a clear framework for responsible digital asset development.
The “first-ever” fact sheet released by the White House consists of seven parts: (1) Protecting Consumers, Investors and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Promoting Financial Services (4) advance responsible innovation; (5) strengthen our global financial leadership and competitiveness; (6) combat illicit finance and (7) explore U.S. central bank digital currency (CBDC).
While some of these sections do not contain any particularly new information, the federal agency recommends creating a federal framework for non-bank payment providers, in addition to encouraging the adoption of instant payment systems such as FedNow, which is expected to launch in 2023.