[Article] U.S. Treasury: Overview of the Digital Assets International Participation Framework
Fact Sheet: Framework for International Engagement on Digital Assets
Source: us Treasury website
Bob BlockBeats
On July 7, 2022, the U.S. Treasury Department published Fact Sheet on its website: Framework for International Engagement on Digital Assets, which is translated by BlockBeats, summarizes the principles and frameworks of the International development of the US in the field of Digital Assets.
Today, the Secretary of the Treasury, in consultation with the Secretary of State, the Secretary of Commerce, the Administrator of the U.S. Agency for International Development (USAID), and heads of other relevant agencies, submitted to President Biden a directive in accordance with the President's Executive Order on Ensuring responsible Development of Digital Assets (March 9, 2022), A framework for cross-sectoral engagement with foreign counterparts and international forums. The executive Order Outlines a collaborative, cross-sectoral approach to addressing the risks and leveraging the potential value of digital assets and their underlying technologies, including through international engagement, to adapt, update, and strengthen the development of global principles and standards on how digital assets are used and traded. The executive order also directs the government to promote the development of digital assets and central bank digital currency (CBDC) technology consistent with our values and legal requirements.The elements outlined in the framework aim to ensure that core US democratic values are respected when it comes to the development of digital assets; Consumers, investors and businesses are protected; Maintaining appropriate global financial system connectivity and interoperability of platforms and frameworks; Safeguarding the safety and soundness of the global financial system and the international monetary system.
Technology-driven financial innovation is often cross-border and can affect households, businesses and governments around the world. Therefore, public authorities, private sector and other stakeholders between international cooperation to maintain high regulatory standards and the fair competition environment, expand access to safe and affordable financial services opportunities and reduce the cost of domestic and cross-border payment is crucial, including by continuing to realize the modernization of public payment system.Imbalances in regulation, supervision and compliance across jurisdictions create opportunities for arbitrage and increase risks to financial stability and the protection of consumers, investors, businesses and markets. Poor AML/CFT regulation, oversight, and enforcement in other countries challenge the ABILITY of the United States to investigate the flow of illicit digital asset transactions that often move offshore, as is often the case with ransomware payments and other money laundering related to cybercrime. Frictions make cross-border payments and remittances slow and costly, especially when they are sent to developing or emerging economies.
Objectives of this framework
This framework follows the key U.S. policy objectives set forth in the Executive Order on Ensuring the Responsible Development of Digital Assets (March 9, 2022) and is tailored to our participation in international collaboration:
1. Protect consumers, investors and businesses in the United States and around the world by promoting technology and regulatory standards that reflect American values;
2. Protect U.S. and global financial stability and mitigate systemic risks;
3. Mitigate illicit financial and national security risks from misuse of digital assets and address foreign efforts to promote standards and promote their protocols;
4. Strengthen U.S. leadership in the global financial system and in technological and economic competitiveness, including through the responsible development of payment innovation and digital assets, and by advancing technological and regulatory standards consistent with U.S. values;
5. Promote access to safe and affordable financial services;
6. Support technological advances to increase shared learning by fostering research and relationships that promote the responsible development and use of digital assets.
The U.S. government has been actively engaged in international forums and bilateral partnerships on many of these issues, and will continue to advance matters to achieve the President's policy goals.
The steady participation has laid a solid foundation for expanding strategic participation in the future
The U.S. government has been actively engaged internationally on digital asset issues. For example, during its chairmanship of the Financial Action Task Force (FATF) from 2018 to 2019, the United States led the development and adoption of the first international standards for digital assets. During its G7 presidency in 2020, the United States established the G7 Digital Payments Expert Group to discuss CBDC, Stablecoin and other digital payments issues. In 2021, G7 work resulted in a set of common policy principles for retail CBDCS [1], which set out the principles for jurisdictions to explore and potentially develop CBDCS. Moreover, while a country's CBDC will be issued by its central bank, the infrastructure to support it is likely to involve both public and private participants. This provides an opportunity for U.S. companies to take the lead in developing these technology systems, and for the U.S. government to work with G7 partners to encourage technology development that will support the CBDC, if identified as appropriate, consistent with the G7's long-standing public commitment to transparency, the rule of law, and sound economic governance.
In addition to these contributions, the United States remains actively engaged in digital asset cooperation through multilateral forums and will continue to increase its engagement with these institutions. The United States continues to work on the G20 roadmap to address challenges and frictions in cross-border payments, including improvements to existing systems, potential barriers to data localization and other frictions in data governance frameworks, the international dimension of CBDC design, and the potential to properly regulate Stablecoin deployments. The United States is actively engaged as part of the Financial Stability Board (FSB), which, along with international standard-setting bodies, leads work on stablecoins, other international dimensions of digital assets and payments, and cross-border payments.
The United States must continue to work with international partners on developing digital payment architectures and standards for CBDCS to reduce payment inefficiencies and ensure that any new payment systems are consistent with values and legal requirements. Such international work should continue to address the issues and challenges posed by digital assets, including financial stability; Protecting consumers and investors; Business risk; Money laundering, financing of terrorism, financing of proliferation, evasion of sanctions and other illicit activities. In addition, the United States will promote the adoption and implementation of international standards through bilateral and regional engagement. In all its actions, the United States will seek to ensure consistent messaging, reduce redundancy, and encourage maintenance of work within its key stakeholders.
Major international participants
Group of Seven: The United States will continue to engage with the G7 on a wide range of issues related to digital payments, including the role of the public and private sectors in money creation and flow, considerations related to CBDCS, and the impact of new technologies on the international monetary system. The United States will also work more aggressively with key Allies and partners to develop a vision for digital assets that aligns with American values and goals; Identifying financial stability, national security and other risks; And promote the development and adoption of strong regulatory and supervisory policies to mitigate these risks. In 2020, under the US presidency of the G7, the US established the G7 Digital Payments Expert Group (DPEG) as a forum to discuss and develop a shared vision for digital payments. The G7 publicly expressed its views on digital assets through the annual G7 finance Ministers and central Bank Governors statement on digital payments, and published a set of Retail CBDC Public Policy Principles in 2021.
Group of twenty: The United States will work with other major economies through the G20 to take the lead in reducing cross-border payment challenges across use cases and jurisdictions; Identifying financial stability risks to digital assets; Promote and, where necessary, promote stronger regulatory, supervisory and other financial sector policies on digital assets; And share experiences on the macro financial challenges associated with digital assets. In 2020, the G20 adopted a roadmap to strengthen cross-border payments. This road map sets out an ambitious work plan to meet our policy priorities of developing a faster, cheaper and more transparent international payment system, including using new technologies where appropriate.
Financial Stability Board (FSB): The United States will continue to use the Financial Stability Board as a forum to work to monitor, identify, and promote a common understanding of global financial stability risks posed by digital assets; Consider policy responses to identified risks; Promoting international cooperation; And promote our technology priorities in cross-border payments. Since 2019, the FSB has prioritised its work on digital assets and has published several reports on the subject, including but not limited to: 1.) Monitoring, regulating and supervising "global stability" arrangements (2020); 2.) G20 and CPMI coordination to strengthen the Cross-border Payments Roadmap (2020); 3.) Assessing the risk of crypto assets to financial stability (2022). Through this forum, we will seek to ensure that we understand and can take deliberate action to appropriately address financial stability risks or systemic risks.
Financial Action Task Force against Money Laundering (FATF) and International Organization against Money Laundering (FIUs): The United States will continue to support countries in implementing FATF standards for virtual assets and value-added services; Monitor significant changes in the virtual asset department; Raise awareness of the ransomware threat and related money laundering; And communicate FATF's position to implement appropriate policy options for CBDC programs. The FATF has set international standards for preventing money laundering, terrorist financing and proliferation, and more than 200 countries and jurisdictions are committed to implementing them. The United States, under the leadership of the Treasury Department, co-chairs the FATF Foundation's Virtual Assets Working Group. Since 2018, FATF has clarified that FATF standards apply to virtual assets and virtual asset service Providers (VASPs), developed resources to help the state and private sector implement these standards, and noted that FATF standards apply to CBDCS, similar to any other form of fiat currency issued by central banks. The United States will also continue to support the Financial Intelligence Unit (FIU) in developing best practices for sharing financial intelligence through anti-money laundering organizations. Aml brings together financial intelligence agencies to support international efforts to combat money laundering/financing of terrorism, including those related to digital assets.
Organization for Economic Cooperation and Development (OECD): The United States will continue to work through the OECD forum with like-minded countries on policies that support efficient, open, and stable international markets, including best practices that support digital assets; Monitor, identify and help promote a common understanding of the risks digital assets pose to consumer financial protection; And improving global tax compliance in crypto assets. Among its functions, the OECD works with international bodies such as the G20 on policy coordination and publishes reports on a range of topics related to digital assets. This includes reports on institutional adoption of crypto assets and decentralized finance (DeFi), as well as the development of financial consumer protection standards that take digital assets into account.
Other Standard Setting Bodies (SSBs): The United States will continue to participate in sectoral and intersectoral international standards-setting bodies related to digital assets, and will increase our work in these forums to ensure that we play a leading role in developing relevant standards. Setting standards in the rapidly evolving ecosystem of digital assets is critical to ensuring that many of our key policy priorities -- from privacy and respect for democratic values to reducing cross-border friction and increasing interoperability for access to secure and affordable financial services -- are incorporated into any new system. For example, the United States financial supervisory authority reviews and updates, as appropriate, existing guidelines, standards and principles for the regulation and supervision of digital assets active within its mandate through the INTERNATIONAL SSB. The FEDERAL Reserve Board (FRB) also participates in the BIS central bank forum to discuss CBDC and other developments in the payments arena. In 2021, the New York Fed also launched the New York Innovation Center (NYIC), a strategic partnership with the BIS Innovation Center. Ifc works with the Federal Reserve System, the BIS Innovation Center, and experts from the public and private sectors to validate, design, build, and launch new financial technology products and services for the central banking community. Finally, technical standards forums, such as the International Organization for Standardization, develop protocols and other standards for underlying digital assets and payment technologies. Through these forums, the United States will continue to promote the development and adoption of strong digital asset policies so that they can be developed in a responsible manner and in a manner consistent with values.
International Monetary Fund: The United States will support the IMF in expanding its analytical work and oversight to include digital assets that are critical to macro and consistent with its mandate to promote economic and financial stability. The IMF therefore has an important role to play in monitoring, advising, and helping to manage issues arising from the use of digital assets, with a focus on their implications for macroeconomic financial policies, potential spillovers, and the stability and functioning of the international monetary system. The IMF could also provide technical assistance in designing member countries' policy frameworks related to digital assets and payments, as well as providing its core macroeconomic policy advice. In July 2021, IMF staff developed a strategic plan to address the rise of digital assets under its mandate.
World Bank and Regional Development Banks (MDBs): The United States will use its influence in regional development banks to push for greater and more effective evaluation of financial products and services; Develop investment and lending activities related to digital assets that fully reflect the associated risks; And support capacity development efforts to incorporate values in this area. Regional development banks, such as the World Bank, inter-American Development Bank, Asian Development Bank, etc., are institutions where the United States should use its influence to develop policies, programs, and other assistance related to digital assets. Regional development banks support member countries in setting and achieving their development goals through lending and other activities, such as capacity building, as well as efforts to promote access to safe and affordable financial services.
Regional and bilateral cooperation: The United States will identify areas where it can strengthen existing regional and bilateral engagement, as well as with new partners, as appropriate, to achieve our digital assets goals. The United States will prioritize ministries and agencies through engagement under a coordinated framework to explore potential opportunities and risks of digital assets, participate in information sharing, and promote the adoption and implementation of policies, including anti-money laundering/countering the financing of terrorism; And provide technical assistance as appropriate. The United States will explore opportunities for joint experimentation in digital asset technology, market innovation, and CBDC, enhancing our shared learning with this core ally and partner on how to develop systems that meet our common policy goals.
Note [1]: "Retail Central Bank digital Currency" or "retail CBDC" means a form of digital currency or monetary value for payment, denominated in national units of account, which is a liability of the central Bank. It will be designed to be widely available to the public, possibly through intermediaries or directly.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
