The US Treasury seeks to obtain general notes on how to use digital identity tools and other emerging technologies to combat illegal financing in the encryption markets, with one option that is to include an identity examination in smart contracts for decentralized financing (Defi).
the ConsultationThis week, it stems from the law of guidance and the establishment of the national innovation of the American Stablecoins Law (the Genius Act), in July.
The law, which defines a regulatory framework for Stablecoin for payment, directs the cabinet to explore new compliance technologies, including APIS, artificial intelligence, digital identity and Blockchain monitoring.
One of the ideas is to request the suspension of the poti protocols capabilities to integrate digital identity accreditation data directly into the code. Under this form, the smart nodes can automatically verify the user credit data before implementing a transaction, and an effective building to know your customer (KYC) and combat money laundering (Blockchain infrastructure).
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Treasury: Digital identifiers can reduce compliance costs
According to the Ministry of Treasury, digital identity solutions, which may include government identifiers, biological measurements, or mobile accreditation data, can reduce compliance costs while enhancing privacy protection.
They can also make it easier for financial institutions and Defi services to discover money laundering, terrorist financing, or evade sanctions before transactions occur.
The Treasury has also recognized the potential challenges, including concerns about data privacy and the need to balance innovation with organizational supervision. The agency wrote, “The Ministry of Treasury welcomes inputs on any issue that commentators believe is related to the treasury efforts,” the agency wrote.
Public comments are open until October 17, 2025. After consulting, the treasury will present a report to Congress and may issue or suggest new rules based on results.
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American banks warn of the yogurt vulnerability in Stablecoin
Last week, several major American banking groups, led by the BPI, urged Congress to tighten the bases under the Genius Law, warning that the vulnerability could allow Stablecoin Exporters to overcome the restrictions imposed on payment.
In a message sent on Tuesday, BPI said that the gap could allow exporters to partner with stock exchanges or companies to provide returns, undermining the intention of the law. The group has warned that the unspecified growth of the standing Stablecoins can lead to up to 6.6 trillion dollars in deposit flows from traditional banks, threatening to reach corporate credit.
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