Cryptocurrency Market: Bitcoin Returns to $39,000

 After suddenly climbing to $42,500 on the morning of March 10, Bitcoin price turned around and is currently hovering around the $39,000 mark on March 12.

The fluctuations surrounding Bitcoin come mainly from US President Joe Biden signing a cryptocurrency decree as well as information about the Russia-Ukraine conflict.

As of the morning of March 12, the largest digital currency increased slightly to $ 39,064, almost unchanged from the beginning of last week. Meanwhile, Ethereum is hovering at $2,582, down slightly by 1.6% from last week.

Other cryptocurrencies were mixed, with Ripple and Terra up 12%, while Cardano and Solana fell 6%. Dogecoin also fell 5%, while Shiba Inu dropped 6%. Cryptocurrency market capitalization has been mostly flat for the past week, hovering at $1.744 billion.

President Biden signs executive order on issuing cryptocurrency

On March 9, US President Joe Biden signed an executive order asking the US Federal Reserve (Fed) to consider the possibility of creating an official cryptocurrency.

Finance Minister Janet Yellen said the effort would "promote a fairer, more inclusive and more efficient financial system", while being able to deal with the illicit financial system and prevent it. risks to financial stability and national security.

The Biden administration sees the popularity of cryptocurrencies as an opportunity to examine the risks and benefits of digital assets, a senior administration official said.

In the newly signed executive order, Mr. Biden also directed the Treasury Department and other federal agencies to study the impact of cryptocurrencies on financial stability and national security.

Brian Deese and Jake Sullivan, two of Biden's top economic and national security advisers, said the executive order sets out the first comprehensive federal digital asset strategy for the United States.

“That will position the United States to play a leading role in innovation and governance of the digital asset ecosystem at home and abroad, in a way that protects consumers, aligns with popular values, our master and enhance America's global competitiveness," Deese and Sullivan said in a joint statement issued on March 9.

The order was signed in the context of US lawmakers and officials expressing concern that Russia could use cryptocurrencies to circumvent sanctions imposed on Russian banks, billionaires and industry because of the war. military service in Ukraine.

The US, EU and Japan find ways to 'block' Russians using virtual currency to avoid sanctions

The US, Europe and Japan are all considering measures to ensure that Russia will not use virtual currencies as a way to avoid financial sanctions that are already in place.

The decentralized nature of Bitcoin in particular and digital currency in general can make it a tool to "evade" the sanctions currently applied to Russia.

Japan's government and digital currency-related organizations are starting to discuss new regulations, including banning exchanges from conducting transactions related to Russia.

All countries are concerned that digital currency becomes a loophole for Russians to transfer assets abroad and circumvent existing sanctions.

Among the current sanctions is an agreement between the US, EU and Japan to block some major Russian banks from the SWIFT international payment system. European finance ministers agreed on March 1 that they would "continue to explore actions to limit sanctions evasion, especially in relation to digital assets".

This is not the first time digital currency has been used for this purpose, said Naoyuki Iwashita, a professor at Kyoto University.

During the Cyprus financial crisis of 2013, the Government introduced capital controls to limit a sudden surge in demand for deposit withdrawals, including freezing deposit accounts. Cyprus is already a tax haven for Russia and so many Russians are said to have quickly exchanged cash for Bitcoin before the restrictions were imposed.

“This is one of the first major cases where digital currency is used for money laundering purposes,” Iwashita said. "The West is afraid that Russia will take a similar measure this time."

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