U.S. Treasury calls on Biden to work with G7, key allies on regulating crypto

A new initiative from the U.S. Treasury calls on President Biden to work with international partners on regulating cryptocurrency.

In a memorandum to the president, the U.S. Treasury — in consultation with the Secretary of State and Secretary of Commerce — is aiming to develop global standards for digital payments and central bank digital currencies (CBDCs) in order to protect consumers and business and ensure financial stability.

“The United States must continue to work with international partners on standards for the development of digital payment architectures and CBDCs to reduce payment inefficiencies and ensure that any new payment systems are consistent with U.S. values and legal requirements,” the report said.

The agencies recommend that the U.S. continue working with the G7 on crypto, focusing on movement of money in private and public sectors, reducing payment inefficiencies, CBDCs and adoption of new technologies.

They also encourage the U.S. to work with key allies to develop a vision for digital assets that ensures financial stability and national security through strong regulations. That includes protecting consumers and investors, guarding against arbitrage opportunities, money laundering, terrorist financing and sanctions evasion.

U.S. Treasury Secretary Janet Yellen testifies during a House Ways and Means Committee hearing on President Biden’s proposed 2023 U.S. budget, on Capitol Hill in Washington, U.S., June 8, 2022. REUTERS/Jonathan Ernst                                                                                                                                    Another recommendation from the memorandum is for the U.S. work with the Organization for Economic Cooperation and Development (OECD), International Monetary Fund (IMF), and G20 to engage with other major economies to make cross-border payments using crypto more seamless and safe. In working with foreign counterparts, the agencies said, rules should reinforce U.S. leadership in the global financial system.

This report comes as the European Union put forth the first comprehensive piece of crypto regulation that’s expected to be implemented within the next 18 months and could set a global standard. Back in the U.S., Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced comprehensive legislation to regulate crypto in June.

Jennifer Schonberger covers cryptocurrencies and policy for Yahoo Finance. Follow her at @Jenniferisms.

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