The US Treasury said Thursday that the United States and its allies abroad should work together to develop common standards for regulating cryptocurrency to make it harder for bad actors to get away with crime.

Uneven regulation, supervision, and compliance across jurisdictions creates opportunities for arbitrage, increases risks to financial stability and protects consumers, investors, businesses, and markets,' the Treasury explained in a press release. The department said insufficient anti-money laundering and terrorist financing rules in various countries make it difficult for the United States to investigate illegal transactions when money flows abroad, such as ransom payments.

Lagarde: Cryptocurrencies are worthless without regulation

Framework

The need to establish common standards was one of the issues addressed in the framework of international cooperation, which the ministry said it had handed over to the president Joe Biden on Thursday. The Treasury Department was directed to develop the framework—in coordination with other agencies such as the Departments of State and Commerce—by a March White House executive order calling for a government-wide strategy for digital assets.

As part of the framework, the Treasury Department also said that the United States should continue to work with international partners and be a leader in discussions about central bank digital currencies, and digital payment structures in general.

The Federal Reserve is exploring the possibility of a US central bank digital currency, but no final decision has been reached.

Treasury has said that this international work must continue to address the full range of issues and challenges raised by digital assets; These include financial stability, consumer and investor protection, commercial risk, money laundering, terrorist financing, sanctions evasion, and other illegal activities.

Treasury has committed to continuing to work within several major intergovernmental organizations, including within the Group of Twenty-seven and the Organization for Economic Co-operation and Development.

Source: Bloomberg East