US Treasury issues framework addressing engagement on crypto with foreign regulators

US Treasury issues framework addressing engagement on crypto with foreign regulators

President Joe Biden has been provided with a framework for crypto by the United States Department of the Treasury. This allows U.S. agencies to collaborate with foreign counterparts.

The U.S. Treasury announced Thursday that it had developed a regulatory framework for cryptocurrency in consultation with the Secretary, Secretary of Commerce, Administrator of U.S. Agency for International Development, and other government agencies, as required by President Biden’s March executive order regarding digital assets. The framework was designed to promote the development of digital assets, while maintaining America’s core democratic values and the stability of the global financial and international monetary systems.

The executive order by President Biden required that the Treasury Department lead an interagency effort to develop policy recommendations for crypto risk mitigation. Given the potential risk to investors from “uneven regulation, supervision and compliance across jurisdictions,” the government department stated that there was a need for international cooperation between public authorities, private sector and other stakeholders.

The Treasury report stated that “inadequate anti money laundering and combating financing of terror (AML/CFT), regulation, supervision and enforcement by foreign countries challenges the United States’ ability to investigate illicit digital assets transaction flows that often jump overseas, such as in ransomware payments or other cybercrime-related cash laundering.”

The Treasury Department stated that it will engage with the G7 policymakers and regulators on digital assets issues, including central bank digital currency, and integrate new technologies into the international financial system. The United States will work with G20 members countries to identify financial stability risks due to digital assets. They will push for crypto regulations and consult with them regarding “macro-financial problems.”

Related: California Governor issues a Blockchain Executive Order Building on the US President’s Regulations

The U.S. will also use other regulatory bodies to coordinate crypto-related policies, including the Financial Stability Board and Financial Action Task Force.

“The United States will seek out opportunities to collaborate on digital assets technologies, market innovation and CBDCs with this core group of allies and Partners to increase our mutual learning about how to develop systems that achieve our shared policy goals.”

In March, President Biden announced an executive order that would establish a united national policy regarding cryptocurrencies. It required coordination and consolidation between U.S. departments and agencies. The order also includes Treasury’s recommendations for a regulatory framework and asks the Federal Reserve to investigate the possibility of developing a central bank-level digital currency. The Justice Department published a June report, fulfilling its executive order obligation, on how it could “strengthen international police cooperation” regarding the illegal use of digital assets.

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