The US Treasury Department has announced a public inquiry on methods to detect illegal activities related to cryptocurrencies as part of new stablecoin regulations.
Public Input on Illegal Operations
The US Treasury has sought comments from the public on 'innovative methods' that financial institutions can utilize to detect illicit activities linked to digital assets. Potential solutions include API integrations, artificial intelligence, digital identity verification, and the use of blockchain technology.
New Stablecoin Law
The recently enacted law, effective from July, establishes a federal regulatory framework for stablecoins, requiring them to be fully backed by US dollars or similar liquid assets. Issuers with a market capitalization exceeding $50 billion are mandated to undergo annual audits. Certain guidelines for stablecoins issued abroad have also been outlined.
Conclusion and Next Steps
Furthermore, the law mandates the Treasury to collect public feedback to identify existing or potential methods that financial institutions may use to detect illicit activities concerning digital assets. The gathered data will be presented to the Senate Banking Committee and the House Financial Services Committee. The comment period closes on October 17.
The call for public input and new regulatory frameworks address important issues regarding safety within the cryptocurrency sector and may lead to new laws aimed at preventing illegal activities.
