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The US Treasury is working on methods to mitigate the hazards associated with unhosted crypto wallets owing to their anonymity.
Although he did not specify how the implementation would take place, Adeyemo stated that the government wishes to maintain the sector’s creative nature.
Expanding crypto and risk associated
In light of the expanding digital character of the banking industry, the source also acknowledged that the US is headed toward crypto regulation in general.
According to Adeyemo, the need to investigate unhosted wallets, which are blockchain addresses, was prompted by the likelihood of Russia using crypto to circumvent financial sanctions following Ukraine’s incursion.
He did add, though, that there is no proof that Russia is utilizing crypto to circumvent sanctions.
On June 10, Treasury Deputy Secretary Wally Adeyemo stated that financial institutions should be mindful of the persons they trade to avoid supporting illicit activity using cryptocurrency.
“We are addressing the special dangers associated with unhosted wallets.” Because unhosted wallets are effectively controlled on a blockchain, determining who owns and manages them might be difficult, allowing chances to exploit this increased anonymity,” he added.
At the same time, Adeyemo pointed out that the attempt to regulate all aspects of the financial system is partly motivated by national security concerns.
Adeyemo claims that:
“America’s international position and capabilities to preserve our national security are dependent on our global financial leadership.”
We in government, like you, recognize that the global financial system’s future is increasingly digital.”
Biden to monitor the development of the crypto
President Joe Biden signed an Executive Order authorizing federal government departments to monitor the development of the crypto sector just three months ago, and the Treasury’s decision came just three months later.
Furthermore, the White House has commissioned a study on Bitcoin mining to establish the asset’s energy usage and environmental impact.
Furthermore, the Treasury’s recent comment adds to the increasing list of potential cryptocurrency rules in the United States.
For example, Senator Cynthia Lummis of Wyoming proposed a crypto regulatory bill to Congress this week.
If approved into law, the measure will clarify which authorities are responsible for regulating cryptocurrency and the classification of other assets.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
