The department is required by the law to issue this request for comment and to use public comments to inform research on methods to detect illicit activity involving digital assets, it said in a Monday (Aug. 18) press release.
This research will consider the effectiveness, costs, privacy and cybersecurity risks, and other considerations associated with tools designed to address illicit finance risks, according to the release.
“This request for comment offers the opportunity for interested individuals and organizations to provide feedback on innovative or novel methods, techniques, or strategies that regulated financial institutions use, or could potentially use, to detect illicit activity involving digital assets,” the release said. “In particular, Treasury asks commenters about application program interfaces, artificial intelligence, digital identity verification, and the use of blockchain technology and monitoring.”
President Donald Trump signed into law the GENIUS Act, which is the country’s first-ever piece of crypto legislation, on July 18.
PYMNTS reported at the time that the long-awaited policy framework could signal a new era for crypto in the U.S., or at least for stablecoins, which the GENIUS Act was written to regulate.
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On Tuesday (Aug. 12), several banking groups asked Congress for a do-over of the GENIUS Act. The American Bankers Association, the Bank Policy Institute and dozens of state banking group sent a letter to the chair and the ranking member of the Senate Banking Committee, saying that several “loopholes” in the stablecoin law could lead to substantial outflows of deposits from traditional accounts.
“Payment stablecoins do not substitute for bank deposits, money market funds or investment products, and payment stablecoin issuers are not regulated, supervised or examined in the same way,” the letter said. “These distinctions are why payment stablecoins should not pay interest the way highly regulated and supervised banks do on deposits or offer yield as money market funds do.”
The GENIUS Act prohibits stablecoin issuers from paying interest on deposits or offering yields to coin holders from investments made with the deposits, but the bank groups’ letter said those prohibitions are easily evaded using a variety of workarounds.
