As the U.S. trade war heats up with China, Treasury regulators are insisting on new, tighter provisions to better clamp down on foreign trade. A piece published earlier this week on China's "little giants" program proves how the East is expanding on technological innovation, specifically in regards to combatting the United States. Now, the U.S. is taking the fight to a whole new digital realm with the nearly 3,000 page-long America Competes Act of 2022.
This aforementioned provision sees an enhanced effort on regulating cryptocurrency exchanges, specifically that of words found on page 1482. Herein, heightened outlawing of both cryptocurrency and internal Bank Secrecy Act measures take hold, giving the Treasury Secretary far more control over digital banking than one might prefer.
For starters, the new language viewed within this document would allow the Treasury Department almost free reign over cryptocurrency networks, disallowing certain consumers the ability even to access exchanges, as well as other various financial institutions. These so-called unchecked discretionary allowances may not, however, be utilized in such a way by the Secretary, yet their very existence opens a nasty doorway to potential calamity for crypto enthusiasts.
Sure, the provision may on the surface appear as a combatant to China's ever-growing foothold in technological innovation, but at what cost does the B.S.A.'s new parameters serve for domestic crypto holders? The Bank Secrecy Act holds within it five "special measures," the first four of which gives the Treasury almost unlimited access to data filed by the everyday consumer.
These first four parameters under the 31 U.S.C. Code § 5318A ensures the Secretary a metadata record of nearly every U.S. citizen's transactional history, putting private information into a criminal investigation file for further use when needed. The fifth term on the docket outright hands the Secretary full power over domestic transactions, disallowing a person or company to transact at all via financial institutions they operate under.
Coupled with the America Competes Act, these endeavors would thus become far more metastasized given the limited input consumers have on said regulation. As it stands currently, those pitted with any potential stopgap are required at least notification before the measure is set in place or up to 120 days within the timetable. This newly-inducted form would strip these considerations and give the Secretary the ability to impose regulation without public notice.
Essentially, America Competes Act ensures the Treasury Secretary's extreme power over domestic customer activities, bequeathing surveillance permissions and prohibitive measures without public discourse or administrative process to back decisions up. It will also expand said "special measures," allotting the Secretary unlimited purveyance over transactions that can be screened as "transmittal of funds."
So long as any transaction is faced with the potential of money laundering or another nefarious transactional endeavor, the Secretary of the Treasury can hold full reign over the affair. These alterations aid in reducing administrative processes while also only expanding the abilities the Treasury can uphold, but it goes even deeper.
The sixth newly-inducted "special measures" provision under America Competes Act is highlighted as the Treasury's newfound ability to consider anything it sees fit as "transmittal of funds," effectively gifting the Department a prohibition permit upon financial institutions, disallowing them any action if the Secretary deems any of their transactions as a money laundering concern.
Underlying this "special measure" is the note on even foreign jurisdiction becoming an open play. In other words, the Secretary can (and most probably will when necessary) prohibit crypto transactions without the need for any due processes. The process can, in theory, go completely unnoticed by consumers, who now aren't required to be informed about a potential stopgap in funds allocation.
This directly endangers the already diminishing crypto arena on a global scale. With the Department having almost full reign over potential digital transitions made between financial intermediaries, foreign or domestic, regulation will only deter newcomers and sour enthusiasts who could see a random pause in any number of transactions made.
While the bill is set to redefine our approach to China and money laundering in general, it lowers our dependability in the cryptocurrency space. If left unchecked, this could damage future transactions, and the overall cryptocurrency market as regulation pushes into this supposed decentralized space. Those interested and fearful can reach out to Congressional members in order to ensure said language is revoked from the Act and more due process realities are set in place for the Secretary of the Treasury.
