The Wild West atmosphere of the cryptocurrency space in the U.S. is coming to an end. The highest levels of the government are getting more involved in providing legal frameworks for their existence and use, and the latest comes from the Financial Crimes Enforcement Network (FinCEN). The Treasury Department body is working on a new set of guidelines that will further advance the Bitcoin space toward maturity and, ultimately, adoption
Secretary of the Treasure Steven Mnuchin hinted at the forthcoming changes when speaking at a recent budget hearing led by the Senate Finance Committee. He indicated that new guidelines for crypto are on their way, and added, “You will see a lot of work coming out very quickly
The assertion echoes recent comments made by the deputy director of FinCEN, Jamal El-Hindi. At the Securities Industry and Financial Markets Association’s (SIFMA) 20th annual anti-money laundering and financial crimes conference held in New York City last week, he warned that crypto entities needed to ensure greater transparency so that financial crimes investigators can do their jobs, and asserted that regulations would be put into place to ensure that this happens
Mnuchin was on hand at the Senate hearing to field questions related to a request to have FinCEN’s budget increased. Senator Maggie Hassan inquired about the nature of the requested amount, which would be used to monitor suspicious crypto transactions and illicit activities, to which the Secretary responded, “We’re about to roll out some significant new requirements” related to crypto enforcement at the agency
More than just preventing crypto from being used for nefarious purposes, the new guidance is also about helping the Bitcoin ecosystem continue to innovate. Mnuchin added, “We want to make sure that technology moves forward, but on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.”
There is also talk about the possibility of the U.S. introducing a central-bank digital currency (CDBC). This is in line with what is currently being seen in other countries, including China, Japan and many more, but any tangible product is most likely still years away. During a Senate Banking Hearing on Wednesday, the chair of the Federal Reserve, Jerome Powell, acknowledged that there was discussion about a CDBC, but added that it most likely isn’t something that needs to happen right away. However, he explained, “Every major central bank in the world right now is doing a deep dive on digital currencies” and acknowledged that the central bank has the obligation of taking it into consideration.
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