The US Government Considers Revising the Definition of “Currency” to Include Cryptocurrencies
The US government is considering revising the definition of “currency” within the framework of the Bank Secrecy Act, to include cryptocurrencies and digital assets, aligning their reporting rules with those of fiat currencies.
If adopted, this new definition could have major implications for financial institutions in the crypto industry, expanding the scope of crypto transactions that need to be reported to regulators.
An Effort to Revise Financial Rules
The US Department of the Treasury and the Federal Reserve are jointly conducting this revision to ensure that crypto and CBDC transactions are subject to the same financial reporting requirements as fiat transactions.
On August 16, the US Department of the Treasury published its semi-annual regulatory agenda, revealing a clear federal intention to harmonize the rules governing cryptocurrencies with those that apply to traditional currencies.
Inclusion of Cryptocurrencies in Reporting Requirements
The main objective of this revision is to ensure that reporting rules also apply to transactions involving “convertible virtual currencies.” These virtual currencies, including cryptocurrencies, are defined as exchange means with a value equivalent to that of legal tender or serving as a substitute, but without legal tender status.
In other words, authorities aim to treat cryptocurrencies as money within reporting requirements, which could significantly expand the scope of crypto transactions to be reported.
An Extension to Legally Recognized Digital Assets
In addition to crypto, the proposal also includes digital assets with legal tender status, such as central bank digital currencies (CBDCs). This extension demonstrates regulators’ willingness to capture a wide range of digital assets under the Bank Secrecy Act, strengthening surveillance of financial flows in the digital era.
If this proposal is adopted, it could redefine compliance obligations for financial institutions operating in the digital asset ecosystem. By including cryptocurrencies and CBDCs in reporting requirements, regulators seek to reduce the anonymity of crypto transactions while aligning these assets with existing standards for traditional currencies.
