The U.S. Department of the Treasury on Thursday published an initial fact sheet, which outlines how it works on crypto with foreign lawmakers. It is the Department’s first product since President Joe Biden’s executive order earlier this year.
Protecting core American values
The purpose of the framework – as described in the fact sheet – is to respect the core values of American democracy. Among the issues addressed in the paper are consumer, investor, and corporate protections. Further, the fact sheet talks about the security of the global financial system and interconnectedness.
According to the fact sheet, the framework was built in part to reduce the potential use of crypto for illicit purposes. But also to improve access to financial services and support technological advances. The main goal is to “strengthen the U.S. leadership position in the global financial system.”
Promising words
Often in regulation and similar documents we see mostly negativity. After all, the crypto industry is restricted by new regulations. In this case, there is also plenty of positivity.
“The United States should continue to work with international partners on standards for digital payment infrastructure and Central Bank Digital Currencies (CBDCs) to reduce inefficiencies and ensure that new payment systems are consistent with U.S. value and law requirements,” the fact sheet states.
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These words clearly reflect that the United States sees potential in technology to make the international payment system more efficient. Chances are that in this reasoning they also have the Bitcoin Lightning Network in mind. After all, this makes it possible to send money directly to the other side of the world practically without cost.
Right now, we still use the sticky old SWIFT system for that, where many middlemen grab coarse percentages on every transaction. The Bitcoin payment chain has the potential to make huge efficiencies in that.
For a lot of parties, that would increase profit margins enormously. For example, think about restaurants that generally have a profit margin of around 10 percent. If instead of 3 percent on a credit card payment, they suddenly have to give up nothing, that’s a huge advance for the industry.
United States is going to take an active role
Another interesting point that emerges from the fact sheet is that the United States is going to take an active role in the rule-making process. “The United States will promote the adoption and implementation of international standards through bilateral and regional collaborations,” the document reads.
Thus, it appears that the United States intends to establish an international industry rule framework as soon as possible.
Currently, the crypto industry still has a reputation, in most cases justifiably, as the digital version of the Wild West. Clear and international regulation has the potential to put an end to that.
While rules and governments do not necessarily fit with the fundamental ideas of bitcoin, for many investors this could be the push they need to invest. After all, rules do provide certainty for an investor.
