The executive of President Biden required an interagency effort to develop policy recommendations to mitigate cryptocurrency-related risks. The US Treasury Department said it would engage with G7 policymakers and regulators to discuss creating a CBDC and integrating new technologies.
US President Joe Biden recently received a legal framework for regulating cryptocurrencies from the US Treasury Department. That set of rules would allow US government agencies to work with their foreign counterparts.
The US Treasury Department recently reported on that regulatory framework in consultation with several government agencies. They talked to the Secretary of State, the Secretary of Commerce, and the US Agency for International Development. The executive order issued by President in March required them to do so.
According to the US Treasury Department, the above framework aimed to encourage the development of digital assets. They stressed that they must respect the fundamental democratic values of the United States. In addition, they said that they must guarantee the stability and security of the financial and monetary system worldwide.
The executive of President Biden required the US Treasury Department to lead an interagency effort to develop policy recommendations. The primary purpose of that work was to mitigate the risks associated with cryptocurrencies.
The government department stated it was necessary to create international cooperation between public authorities, the private sector, and other interested parties. They argue there are potential risks to investors due to uneven regulation, supervision, and enforcement across jurisdictions.
The US Treasury Department Warns about the Alleged Risks of Cryptocurrencies
They cited inadequate regulation, supervision, and enforcement of anti-money laundering and anti-terrorism financing (AML/CFT) regulations in other countries. They pointed out that this calls into question the ability of the US to investigate illegal cross-border transaction flows of crypto assets. For example, they said this is the case with ransomware payments and other types of cybercrime-related money laundering.
Concerning international cooperation and coordination, the US Treasury Department said it would engage with G7 policymakers and regulators on cryptocurrency-related issues. They would also deal with creating central bank digital currencies and integrating new technologies into the international monetary system.
They said they would also work with G20 member countries to identify potential financial stability risks from crypto assets. Besides, they seek to push forward the regulation of cryptocurrencies and consult with members on macro-financial challenges.
Other regulatory agencies the US government will turn to include multilateral development banks. They will consult the Financial Stability Board, the Financial Action Task Force, the Organization for Economic Co-operation and Development, the International Monetary Fund, and the World Bank.
The US Treasury Department stated that the US would explore opportunities for joint experimentation on digital asset technologies, market innovations, and CBDCs. They think that those allies and partners will allow them to increase their shared learning on how to develop systems meeting their shared policy objectives.
In mid-March, President Joe Biden issued an executive order to establish a unified national policy for cryptocurrencies. It required coordination and consolidation among US government agencies and departments to achieve their goals in that regard.
Besides the recommendations by the US Treasury Department, the order calls on the Federal Reserve to investigate the development of a CBDC. In June, the Justice Department released a report on international law enforcement cooperation to prevent the illicit use of cryptocurrencies.
By Alexander Salazar
