The statement comes from the President's Working Group on Financial Markets, which is a Treasury-centric working group that makes recommendations to the president and federal regulators.
The group highlighted the importance of anti-money laundering and counter financial terrorism measures, including on-chain know-your-customer (KYC) verification among all parties, even unhosted wallets. This comes after the Financial Crimes Enforcement Network unveiled a proposed rule that would also create heightened KYC requirements for transactions between money service businesses and unhosted wallets.
The new report also said stablecoin issuers should be able to comply with sanctions obligations, as well as have the ability to enable one-to-one redemptions. Since algorithmic stablecoins like Empty Set Dollar and crypto-backed stablecoins like Dai aren't backed with fiat currencies, it is unclear how these stablecoins might be affected by the working group's suggestions.
The working group's statement also suggests that stablecoins could pose a threat to "international monetary stability" and recommends actions so that "stablecoin arrangements should not undermine confidence in and the ability of domestic fiat currencies."
“The statement reflects a commitment to both promote the important benefits of innovation and to achieve critical objectives related to national security and financial stability. Regulators will continue to look closely at stablecoin arrangements, and look forward to future dialogue on these issues,” Treasury Deputy Secretary Justin Muzinich said in a statement.
From the removal of many Russian banks from SWIFT to a seemingly constant flow of new sanctions, Russia’s invasion of Ukraine has left many to wonder: Is the country likely to lurch towards cryptocurrencies? And if so, what does this mean for businesses that are holding and/or using crypto? Crypto and sanctions evasion Although crypto […]
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.