While the US authorities are intensifying work on developing crypto regulations, the country’s Department of Treasury has presented to President Joe Biden a framework to facilitate international cooperation on introducing such regulations and standards at the international level.
This is arguably a major development, and it may pave the way for intensified efforts by Washington to develop international regulations for the sector.
The framework was prepared in cooperation with “the Secretary of State, the Secretary of Commerce, the Administrator of the U.S. Agency for International Development (USAID), and the heads of other relevant agencies,” the department said in a statement.
The Treasury has developed its proposal in response to the president’s Executive Order on Ensuring Responsible Development of Digital Assets from March 9, which outlines an interagency approach to address the risks related to the use of cryptoassets, but also to harness their potential benefits.
The order identifies international engagement as a means to “adapt, update, and enhance adoption of global principles and standards for how digital assets are used and transacted,” according to the statement.
Under the framework, the US will continue to engage with the G7 group – which also includes Canada, France, Germany, Italy, Japan, the UK, and the European Union as a ‘non-enumerated member’- on various issues related to digital payments. These are to “include the roles of the public and private sector in the creation and movement of money, considerations related to [central bank digital currencies] CBDCs, and implications of new technologies on the international monetary system.”
Global regulations and standards for cryptocurrencies are to be also developed through the larger international group, the G20, which also comprises large developing economies.
Washington’s engagement through the Financial Stability Board (FSB) will be used as a forum to work on monitoring, identifying, and fostering a shared understanding of financial stability risks resulting from digital assets, but also for considering policy responses to the identified risk, and promoting American technical priorities on cross-border payments, according to the framework.
Regarding the International Monetary Fund (IMF), the US will support the organization “in expanding its analytical work and surveillance to include digital assets, where macro-critical and in line with its mandate to promote economic and financial stability.”
In Washington’s view, the Financial Action Task Force (FATF) should continue to support countries in implementing the FATF standards for virtual assets and virtual asset service providers (VASPs). Meanwhile, the Egmont Group of Financial Intelligence Units (FIUs) will prove to be useful in developing best practices to share financial intelligence, and support international anti-money laundering/counter financing of terrorism efforts related to cryptoassets.
“What’s outlined in the framework is intended to ensure that, with respect to the development of digital assets, America’s core democratic values are respected; consumers, investors, and businesses are protected; appropriate global financial system connectivity and platform and architecture interoperability are preserved; and the safety and soundness of the global financial system and international monetary system are maintained,” according to the document.