The Bank Policy Institute (BPI), a US banking group, has expressed its support for new legislation sponsored by Senator Elizabeth Warren. This new regulation aims to tackle money laundering in the digital asset market. The proposed measure, known as the Digital Asset Anti-Money Laundering Act, has received support from a number of other institutions. The National Consumer Law Center and the National Consumers League are two examples.
The primary goal of this law is to include digital assets into the Anti-Money Laundering (AML) framework in order to safeguard the security and integrity of the US financial system. At the moment, existing AML regulations do not apply to digital assets. This is undesirable because it creates a loophole that might be exploited by criminals for money laundering.
Participants authenticating and safeguarding transactions on blockchains will be compelled to keep records of their clients’ identities if the measure becomes law. This action is anticipated to improve openness and accountability in the cryptocurrency market. As a result, criminals will find it more difficult to participate in illicit operations. This will have a significant impact on the quantity of money laundering that occurs in the United States.
Furthermore, the legislation intends to make the usage of digital asset mixers such as Tornado Cash illegal. There are technologies meant to conceal blockchain data, which might be used for illegal reasons. They have been utilized since criminal operations began when Bitcoin was their primary cryptocurrency of usage.
NEWS: 🚨🇺🇸The Bank Policy Institute (BPI), a #US banking group, has expressed its support for the new crypto bill sponsored by Senator Elizabeth Warren.
— Walletor (@walletorapp) July 30, 2023
Despite the bill’s support, some in the cryptocurrency world remain concerned. Critics believe that implementing AML laws on DeFi, or decentralized companies that run on code, will stifle innovation and add unneeded obligations. These individuals believe that it may generate difficulties for new businesses when they initially begin operations.
Finally, the US financial advocacy group’s support for Senator Warren’s measure demonstrates the rising awareness of the need to combat money laundering. It will be critical to find a balanced strategy that safeguards both innovation and financial integrity. This is to help define the future of US banking and cryptocurrency rules in the United States.