The Treasury Department’s first digital asset guidance is the latest chapter in applying federal regulation to the digital asset market.
Adding new oversight and consumer protections are critical pillars of the Treasury Department’s new cryptocurrency framework, as digital money continues to rise in popularity.
Released in the first digital asset guideline issued by the agency per President Joe Biden’s executive order, officials within Treasury—as well as the State and Commerce Departments, the U.S. Agency for International Development, and others—designed the first interagency guidance to respond to the global adoption of digital currencies.
Through this approach, the federal government aims to apply various regulations to the digital asset class.
“Technology-driven financial innovation is frequently cross-border and can impact households, businesses and governments across the world,” the press release reads.
In addition to protecting consumers and financial institutions from fraud related to cryptocurrencies, other goals of the framework include reinforcing U.S. leadership, mitigating risk and fraud, promoting equitable access to digital assets and supporting the technology that fuels cryptocurrency transactions.
It will also work to foster bilateral cooperation between nations to control international transactions and prevent the evasion of sanctions through digital assets.
“International cooperation among public authorities, the private sector and other stakeholders is therefore critical to maintaining high regulatory standards and a level playing field, expanding access to safe and affordable financial services, and reducing the cost of domestic and cross-border payments, including through the continued modernization of public payment systems,” a Treasury spokesperson told Nextgov.
Governments all over the world have been studying how best to regulate and potentially incorporate cryptocurrencies and other digital monies and assets into standard monetary procedures. Leaders attending the G7 summit in 2021 discussed a set of uniform policy standards for retail central bank digital currencies to explore a state-run digital currency, along with other cryptocurrency topics.
“The framework for international engagement on digital assets will play and [sic] important role in the Treasury Department’s work on digital assets,” a Treasury spokesperson told Nextgov. “The framework will serve as a guide to partners across the federal government to inform and prioritize their international work and engagement on this topic.”