A new DHS Bill With Potentially Severe Consequences
Although the Homeland Security Assessment of Terrorists Use of Virtual Currencies Act was originally drafted in May of this year, it has only become public knowledge last night. This particular bill has seemingly been approved by the House of Representatives without too many knowing about it in the first place. That is not entirely surprising, though, as a lot of legislative decisions are only made public knowledge once they are approved and go into effect. This particular bill is no different whatsoever.
What makes this particular bill so interesting is how it touches upon the concept of virtual currencies. The goal is to make a proper threat assessment on the terrorist use of virtual currencies. The US government is still very concerned about terrorist activity around the world, but especially in the domestic market. These organizations collect millions in funding every quarter yet no one knows for sure how they succeed in doing so.
120 days from the enactment of the Homeland Security Assessment of Terrorists use of Virtual Currency Act, a threat assessment regarding virtual currency will be conducted. This task falls on the shoulders of the Under Secretary of Homeland Security for Intelligence and Analysis. He will coordinate with the appropriate Federal partners in this regard. Once the threat assessment has been completed, the task force will look into coming up with adequate countermeasures.
One thing about this bill that will irk a lot of people is how this new Act defines virtual currencies. It refers to any digital representation of value functioning as a medium of exchange, store of value, or a unit of account. While this also includes Bitcoin and virtual currencies, this language seemingly should be looked at in a much broader spectrum. An online representation of value, such as a PayPal balance, a virtual debit card, or a prepaid debit card would fall under this moniker as well.
For the time being, it remains a bit unclear how this new Act will affect all of these existing payment methods. It is not the first time cryptocurrencies are referred to as a potential tool for terrorist financing. However, there has never been any official documentation confirming Bitcoin and altcoins are used for this specific purpose in large quantities. Virtual currency exists in many different forms, shapes, and sizes. Some of these payment methods – especially the anonymous ones sold in regular stores – may turn out to be the bigger threat in the end.
The Homeland Security Assessment of Terrorists Use of Virtual Currencies Act is a powerful tool to address terrorist financing once and for all. However, it is still too early to tell what the outcome of this venture will mean for the industry as a whole. The wording is purposefully vague to leave room for plenty of speculation, by the look of things. We should know more about these efforts by early 2018. Rest assured the cryptocurrency industry will keep a close eye on this new task force.