U.S. Treasury is putting in place a system which will reduce the risks associated with unhosted crypto wallets owing to their anonymity. Cryptocurrency is known for its anonymity and it is this anonymity and Decentralization which are its strengths and Achilles heel in equal measure.
Wally Adeyemo Deputy Secretary of the U.S. Treasury did not specify how this will come about but he did say that the Biden Administration wants to maintain the sector’s creative nature.
The digitization of the finance and the banking sector is soon going to become a reality and the need for crypto regulation is acutely being felt.
U.S. Treasury Action To Preempt Russia
The latest move by U.S. Treasury to investigate unhosted wallets comes in the wake of the possibility of Russia using them to circumvent strict economic sanctions which has been put in place after Russia’s invasion of Ukraine. However he has added that there is no proof tat Russia is making use of crypto currencies to bypass financial sanctions.
U.S. Treasury Action To Manage Additional Anonymity
Unhosted wallets have additional dangers because they are essentially controlled on a block chain it is almost impossible to identify who owns and manages and this additional anonymity can be effectively employed by unscrupulous element and rogue governments like North Korea and even by terror organizations. The latest attempts to regulate different aspects of the present financial regimens as well as new entities like cryptocurrencies are partly motivated by national security concerns.
U.S. Treasury Deputy Secretary added that America’s national security is dependent upon its position as a global financial leader and the realization that global financial system’s future is increasingly digital.
President Biden To Scrutinize The Expansion Of The Crypto
The need for a regulatory authority to monitor the working of the crypto sector has gained new urgency. Recently President Biden signed an executive order which authorized different Federal Agencies to monitor the activities of the Crypto Sector and the Treasury’s decision is seen as the logical result of the president’s order.