Treasury reveals its global cryptocurrency response – a kind of POLITICO

With help from Derek Robertson

Like the challenges of the global monetary system The rise of digital currencies has multiplied, so have the questions of how the United States plans to respond.

Now there are some kind of answers.

Yesterday, the Ministry of Finance announced a new one framework for international engagement in digital assets – as imposed by President Joe Bidens in March verdict on crypto.

However, those looking for the Biden administration to signal a clear vision will have to wait.

Treasury’s Release of 2400 words detailing the framework describes its ongoing efforts to do things through multilateral institutions such as promoting the development of central banks’ digital currencies, lowering the cost of cross-border payments and cracking down on money laundering.

But the release is full of statements such as: “We will work to ensure that we learn about and can implement thoughtful measures to reduce the risk of financial stability or systemic risk,” and “The United States will also develop more actively, with key allies and partners , a vision for digital assets in line with American values ​​and goals. “

The tone alone provides a fairly good illustration of the cultural clash between the digital currency mavens and nation states. Crypto’s most eager supporters tend to express themselves in sweeping manifesto and dramatic pieces of sound. “Bitcoin is Venice,” he declares such a manifestowhich goes on to explain that “Bitcoin is gravity” and “Bitcoin is Halal.”

With that standard, you can call the Treasury’s statement a triumph of bureaucratic vagueness. But that vagueness provides a window into the current state of, and the prevailing uncertainty surrounding, American policy-making.

There are a few things happening here:

1. “Digital assets” is a broad category.

The federal government wants to encourage some applications – such as central bank digital currencies – and discourage others, such as ransom payments. If you were to ask an executive agency, “What are we going to do with the Internet?” It will also have different things to say about different aspects of the technology.

2. Developments in digital assets are moving at a very rapid pace, affecting many areas of concern to the authorities.

This seems to require doing something crucial, quickly. But in fact, things are happening so fast that it may be too early to act, especially if an effective response requires coordination between many national authorities.

Should the government, for example, go more aggressively to stop the nation state adoption of cryptocurrencies? It is not clear if it will develop into an urgent problem, or just go out of its way. So there is a lot of consultation and observation going on – and a policy that is very similar “hurry up and wait” in many more words.

3. Crypto is very political.

The final direction of US policy will probably be largely dictated by the outcome of elections and battles in Congress, whose job, after all, is to make laws.

It sets limits not only on the Ministry of Finance’s framework, but the whole process for the executive branch outlined by Biden’s order.

It is worth noting that the term “American values” appears six times as the guide star of American politics in the Treasury’s statement.

But what are these values, really? Monetary policy has posed hotly debated, eternally unresolved questions about American values ​​ever since Thomas Jefferson and Alexander Hamilton made the decision over First Bank of the United States.

And more than most times in US history, the definition of American values ​​is hotly contested right now. How do decision makers weigh the trade-offs between privacy and the fight against terrorism? US economic superiority and national sovereignty?

In short, which “American values” will take precedence in US digital asset policy? We, and the Ministry of Finance, must keep up.

It’s been a tough spring and summer for stack coins Cryptocurrencies whose values ​​are linked to already existing currencies or commodities, sometimes maintained by an algorithm – with the high-profile Terra collapses invites to a round with unwanted regulatory control.

POLITICOs Sam Sutton reports today on a blockchain platform that becomes proactive in terms of disclosure: Paxos, which this morning announced its monthly reports on the financial health of the stack coins it offers, will be more detailed, and publish the identification number that will allow everyone to look up the composition of the assets backing them the coins.

Paxos’ stablecoin offer, USDP and BUSD, has not become as widespread as those of big industry names like Tether or Circle, but the move reflects a real concern about the impact such products may have on the fiat market. Some stack coins are backed by traditional assets such as treasury bills that have led legislators and Ministry of Finance to investigate their regulatory status … or lack thereof. – Derek Robertson

Think back to the first days of the pandemic, when gubernatorial press conferences replaced the NBA Finals as a must-watch TV – and a direct remark from New Jersey Governor Phil Murphy about the state’s need for programmers who master COBOL, a more than half-century-old programming language, triggered a round with anxiety about the need to update the most outdated government IT systems.

Maybe today’s programmers just needed to catch up. The New York Times reported this week in vogue among some young programmers to learn COBOL, «Latin of the software code». A 24-year-old engineer who taught herself the language told the newspaper that it has led to offers of more senior positions than she expects, as software used in everything from government to financial services is still written in the language.

Nor is it the only old language that remains functional and widely used – last year the government’s accountability office published a report on “legacy systems” in federal government that distribute everything from assembly language to Fortran. To quote an engineering director at Stack Overflow in conversation with Times about what she described as “ugly older language”, the ruling philosophy of the government may still be “If it is not destroyed, do not fix it”. – Derek Robertson

Stay in touch with the entire team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Konstantin Kakaes ([email protected]); and Heidi Vogt ([email protected]). Follow us on Twitter @DigitalFuture.

Ben Schreckinger covers technology, finance and politics for POLITICO; he is an investor in cryptocurrency.

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