President Joe Biden is set to sign an executive order on cryptocurrency this week, marking the US government’s first step toward regulating how digital currency is traded.

The order comes as the US and its allies have imposed strict sanctions on Russia’s central bank and defense industry, as well as President Vladimir Putin and wealthy Moscow elites who run in his inner circle.

The Biden administration’s approach to the digital currency has garnered attention as officials have raised concerns over whether organizations and individuals in Russia could use cryptocurrency to avoid the sanctions.

Two people familiar with the process told the Associated Press that the executive order is expected to be issued later this week, but has been long in the works prior to the war.

The order will describe which government agencies need to develop policies and regulations on digital currencies. It is expected to include a request for the State Department to ensure that American cryptocurrency laws are aligned with those of US allies. The order will request the Financial Stability Oversight Council, responsible for monitoring the stability of the US financial system, to study illicit finance concerns.

The order will also explore the possibility of creating a new central bank digital currency, something that the Federal Reserve issued a paper on in January that outlined the risks and benefits of US-backed digital currency.

White House officials say they’re on the lookout for the creation of front companies and alternative financial institutions that Russia may try to use to sidestep sanctions.

Treasury Secretary Janet Yellen addressed the concerns last week, saying: ”We will continue to look at how the sanctions work and evaluate whether or not there are liquid leakages and we have the possibility to address them. I often hear cryptocurrency mentioned and that is a channel to be watched.’

On Monday, the Financial Crimes Enforcement Network advised ‘all financial institutions to be vigilant against potential efforts to evade the expansive sanctions and other U.S.-imposed restrictions’ in connection to Russia’s war on Ukraine.

‘Although we have not seen widespread evasion of our sanctions using methods such as cryptocurrency, prompt reporting of suspicious activity contributes to our national security and our efforts to support Ukraine and its people,’ acting Director Him Das said in a statement.

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