Source: AdobeStock / FrankBoston

While THE US authorities are intensifying work on the development of regulations on cryptocurrencies, the US Treasury Department has presented President Joe Biden with a scheme to facilitate international cooperation on the introduction of such regulations and standards internationally.

This is likely an important development and could pave the way for intensified efforts by Washington to develop international regulations for the crypto industry.

The department said in a statement that the outline was prepared in collaboration with "the Secretary of State, the Secretary of Commerce, the Administrator of the U.S. Agency for International Development (USAID) and the heads of other relevant agencies."

The Treasury developed its proposal in response to the president's executive order on ensuring responsible development on digital assets on March 9, which outlines an inter-agency approach  to address the risks related to the use of cryptocurrencies, but also to exploit their potential benefits.

The order identifies international engagement as a means to "adapt, update and improve the adoption of global principles and standards on how digital assets are used and managed," according to the statement.

The US will continue to engage with the G7

Under the scheme, the United States will continue to engage with the G7 group – which also includes Canada, France, Germany, Italy, Japan, the United Kingdom and the European Union as an "unlisted member" – on various issues related to digital payments. These must "include the roles of the public and private sectors in the creation and movement of money, considerations related to CBDCs [of central bank digital currencies], and the implications of new technologies on the international monetary system."

Crypto regulations will also be developed with the G20

Global regulations and standards for cryptocurrencies must also be developed through the largest international group, the G20, which also includes large developing economies.

According to the scheme, Washington's engagement through the Financial Stability Board (FSB) will be used as a forum to work on monitoring, identifying and promoting a shared understanding of the risks to financial stability arising from digital assets, but also to consider policy responses to the identified risk and promote American technical priorities on cross-border payments.

As for the International Monetary Fund (IMF), the United States will support the organization "in extending its analysis and surveillance work to include digital assets, where macro-critical and in line with its mandate to promote economic and financial stability."

According to Washington, the Financial Action Task Force (FATF) should continue to support countries in implementing FATF standards for virtual assets and virtual asset service providers (VASPs). Meanwhile, the Egmont Group of Financial Intelligence Units (FIU) will prove useful in developing best practices for sharing financial intelligence and supporting international anti-money laundering/counter-financing of terrorism efforts related to cryptocurrencies.

"What is outlined in the outline is intended to ensure that, with regard to the development of digital assets, America's core democratic values are respected; consumers, investors and businesses are protected; adequate connectivity of the global financial system and interoperability of the platform and architecture are preserved; and the security and robustness of the global financial system and the international monetary system are maintained," according to the document.