US Crypto Framework: What is it?
The USA has been working on a crypto framework since spring. The framework law aims to bring more security to investors and reduce the illegal use of crypto. A digital dollar is also an option. A summary has now been published for the first time. What exactly is it about?
Crypto in the US: leadership to grow
The US White House released a summary yesterday . There, for the first time, what various US authorities have developed over the past six months is brought together.
It’s about the crypto framework law that US President Joe Biden formally called for on March 9 of this year. It is now clear which goals the North American country wants to achieve with a possible law.
The main focus of government agencies is therefore to maintain or even expand their own leadership role. To this end, the promotion of modern technology and the establishment of international standards are planned.
CBDC possible in the US
When Joe Biden announced the regulation of a crypto framework, it was not considered a good omen in the crypto scene. Only over time did this attitude change. The reason for this is the generally negative attitude of the Biden administration towards Bitcoin and Co.
Finance Minister Janet Yellen in particular has repeatedly spoken negatively about cryptocurrencies and declared them an undesirable tool for criminals. Such positions are often accompanied by a friendly attitude towards CBDCs.
A digital dollar as CBDC of the USA was therefore obvious. In the new US government report, however, a digital central bank currency is anything but expressly desired.
Although CBDCs are sometimes considered to be highly beneficial – for example for financial inclusion, innovation, cross-border money transactions or secure data traffic – they also highlight the fact that disadvantages could arise.
In summary, the government states in its report:
More research and development is needed on the technology that would support a US CBDC.
Most recently, FED President Neel Kashkari drew attention to the disadvantages of a CBDC. What the White House report mentions positively — the ability for the government to monitor all transactions — is what Kashkari believes is the biggest disqualifying factor.
US crypto framework wants to expand KYC and AML
The USA may want to expand the KYC and AML measures in the crypto industry much more than has been the case so far. The so-called Bank Secrecy Act of the USA could then be applied to a wide variety of marketplaces.
NFT marketplaces such as OpenSea could be considered, as could other unregulated services such as swappers, which only exchange cryptocurrencies with each other. Without access to fiat currencies, such services have so far not had to identify their customers.
Parts of the industry have been expecting for years that this requirement will come up at some point. Crypto veteran Erik Voorhees therefore converted his company ShapeShift into a DAO that can no longer be subject to regulations.
With this increasing surveillance, the USA wants to prevent the use of crypto for money laundering. However, the White House only mentions this option as potentially possible.
So far it is not clear whether this demand will ever be made. Even today, this would not have the desired effect. At least those users engaged in criminal businesses would migrate to decentralized, unregulated alternatives.