The US and its foreign allies must work together to create shared standards for regulating cryptocurrencies to make it harder for bad actors to get away with crimes, Treasury said Thursday.
“Uneven regulation, supervision, and compliance across jurisdictions creates opportunities for arbitrage and raises risks to financial stability and the protection of consumers, investors, businesses, and markets,” Treasury said in a news release.
Inadequate anti-money laundering and terrorism financing rules across different countries make it harder for the US to investigate illicit transactions when money flows offshore, such as with ransomware payments, the department said.
The need for shared standard-setting was one of the topics addressed in a framework for international cooperation the department said it delivered to President Joe Biden Thursday. Treasury was directed to develop the framework—in coordination with other agencies like the State and Commerce Departments—under the White House’s March executive order calling for an government-wide strategy for digital assets.
As part of the framework, Treasury also said the US must continue to work with international partners and be a leader in the discussions on central bank digital currencies, or CBDCs, and digital payment architectures more generally.
The Federal Reserve as been exploring the possibility of a US CBDC but no final decision has been reached.
“Such international work should continue to address the full spectrum of issues and challenges raised by digital assets, including financial stability; consumer and investor protection, and business risks; and money laundering, terrorist financing, proliferation financing, sanctions evasion, and other illicit activities,” the department said.
Treasury committed to continue working within several key intergovernmental organizations, including the G7, G20, and the Organization for Economic Cooperation and Development.