Even with the coronavirus outbreak, 2020 still seems to be the year where crypto will become seriously regulated.
Case in point: At the end of March, the Financial Action Task Force (FATF) explained in its latest report on the state of compliance in the U.S. that it is lacking proper crypto regulation.
FATF Urges U.S. to Follow Its Crypto Guideline
Over the past few months, many of the world’s largest economies have fallen into line regarding cryptocurrency: South Korea passed a bill to more properly regulate cryptocurrencies, Hong Kong is strengthening its Anti-Money Laundering (AML) enforcement, and much more.
Much of this action has been related to the FATF, the global agency whose purpose is to reduce crime enabled through financial systems, crypto included. Last year, the consortium advised all members to follow a guideline it revealed regarding cryptocurrency, which would require the mandatory collection of user data by crypto exchanges and service providers for large transactions.
According to the March report from the FATF, the U.S., while “largely compliant” with the guideline, is not there yet, with there remaining “minor deficiencies”:
It is not entirely clear whether the current approach is sufficiently risk focused, especially since only 30% of all registered CVC [convertible virtual currencies] providers have been inspected since 2014.
The White House Sees It As a Threat
While these “deficiencies” exist, there are signs that the White House and the rest of the government are focusing on crypto as a serious threat.
Earlier this year, the White House budget proposal for the fiscal year of 2021 suggested returning the United States Secret Service — which actually enforces many financial crimes in America — to the jurisdiction of the Treasury.
The budget proposal suggests that this move will “create new efficiencies” in how the Service investigates potential criminal acts enabled by “digital assets and will “prepare the Nation to face the threats of tomorrow.”
Shortly after this budget was proposed, Steven Mnuchin, the Secretary of the U.S. Treasury, said that the Treasury will soon roll out “significant new requirements” for cryptocurrencies and their respective service providers.
These moves may be expedited by the allegation by the U.S. Department of Justice that Venezuelan President Nicolas Maduro used cryptocurrency to “further illicit criminal activity,” including a purported cocaine trafficking ring run by many Venezuelan officials.
Crypto Adoption Is Coming
As moves have been made to reduce the amount of crime enabled through cryptocurrency, there’s also been a concerted push by American politicians to make the cryptocurrency usable.
Representative Paul Gosar in March unveiled the “Crypto-Currency Act of 2020” whose premise is:
By providing much-needed regulatory clarity about cryptocurrency, we will make it easier for businesses, institutions, and everyday Americans to participate in this growing industry. No more murkiness, uncertainty, or confusion.
The controversial politician explained that this bill is absolutely necessary for America’s primacy in innovation, before adding that there’s no way America should be sitting on the sidelines when it comes to cryptocurrency, for digital assets offer “a way for forgotten and oppressed people to participate in the global economy.”
Also, Representatives continue to promote the adoption of the Virtual Currency Tax Fairness Act of 2020, which would solve the primary issue of tax in spending cryptocurrency for day-to-day transactions, ensuring that small crypto transactions would be exempt from capital gains taxes.