Required under President Biden’s executive order on digital assets, the US Treasury published a fact sheet citing the need for consumer, investor and business protections.

The United States Department of the Treasury has delivered a framework on cryptocurrencies for American government agencies to work with their international counterparts.

The fact sheet, published on Thursday, is the first report by the department because of President Joe Biden’s executive order on crypto.

The framework “is intended to ensure that…America’s core democratic values are respected,” pointing to reducing the potential use of crypto for illicit finance, promoting access to financial services, supporting technological advancement and “reinforc[ing] US leadership in the global financial system”.

“Inadequate anti-money laundering and combating the financing of terrorism (AML/CFT) regulation, supervision, and enforcement by other countries challenges the ability of the United States to investigate illicit digital asset transaction flows that frequently jump overseas, as is often the case in ransomware payments and other cybercrime-related money laundering,” said the Treasury report.

In terms of international cooperation and coordination, the Treasury Department said it would engage with policymakers and regulators at the G7 on issues related to digital assets, including central bank digital currencies (CBDCs) and integrate new technologies into the international monetary system.

“The United States must continue to work with international partners on standards for the development of digital payment architectures and CBDCs to reduce payment inefficiencies and ensure that any new payment systems are consistent with US values and legal requirements,” the fact sheet said.

The US will also work with G20 member countries to identify potential risks to financial stability due to digital assets push for crypto regulations and consult with members regarding “macro-financial challenges”.

“Across all engagements the United States will seek to ensure a coordinated message, limit duplication and encourage that work is maintained within its primary stakeholders,” the report added.

Issued in March, the executive order required the Treasury Department to lead an interagency effort in developing policy recommendations for mitigating risks associated with crypto.

The department cited the need for “international cooperation among public authorities, the private sector, and other stakeholders” given the potential risks to investors with “uneven regulation, supervision, and compliance across jurisdictions”.

Besides the factsheet, the Justice Department also published a report in June on how it might “strengthen international law enforcement cooperation” over the illicit use of digital assets.

In addition to the Treasury’s recommendations on a regulatory framework, the order requests the Federal Reserve (Fed) to research the development of a CBDC.

The Fed began working on exploring a digital dollar last year, and released a report on digital currencies this January.

Source: TRT World