The Treasury presents its global crypto response – a kind of POLITICO

With the help of Derek Robertson

As challenges to the global monetary system triggered by the rise of digital currencies have increased, as have questions about how the United States plans to respond.

Now there are some answers.

Yesterday, the Ministry of Finance announced a new framework for international engagement with digital assets – in line with President Joe Biden’s march order on crypto.

However, those who expect a clear vision from the Biden administration will have to wait.

treasury 2400 word edition a detailed description of the structure describes its ongoing efforts to implement, through multilateral institutions, such actions as promoting the development of central bank digital currencies, reducing the cost of cross-border payments, and combating money laundering.

But the release is full of statements such as: “We will work to learn and take thoughtful actions to appropriately mitigate risks to financial stability or systemic risk” and “The United States will also develop more actively along with key allies.” and partners, a vision of digital assets in line with U.S. values ​​and goals.”

The tone alone offers a pretty good illustration of the cultural clash between digital currency mavens and nation states. The most ardent supporters of crypto tend to express themselves in large-scale manifestos and dramatic sound bites. “Bitcoin is Venice,” says one such manifestowhich further explains that “Bitcoin is gravity” and “Bitcoin is halal”.

By that standard, the Treasury Department’s announcement could be described as a triumph of bureaucratic vagueness. But this uncertainty opens a window into the current state and prevailing uncertainty around US policy.

There are several things going on here:

one. “Digital assets” is a broad category.

The federal government wants to encourage some applications, such as central bank digital currencies, and discourage others, such as ransomware payments. If you were to ask an executive agency, “What do we do with the Internet?” he will also talk differently about different aspects of the technology.

2. The development of digital assets is happening at a very fast pace and touches on many areas of government concern.

This seems to be a call to do something drastic, fast. But in fact, things are happening so fast that it may be premature to act, especially if an effective response requires coordination among many governments.

Should the government, say, act more aggressively to prevent the adoption of cryptocurrencies at the national level? It is unclear if this will develop into an urgent problem or if it will simply disappear on its own. So, there is a lot of consultation and observation going on – and a policy that is very similar to “hurry up and wait” in many other words.

3. Cryptocurrency is very political.

The final direction of US policy is likely to be largely dictated by election results and infighting in Congress, whose job it is, after all, to make laws.

This imposes restrictions not only on the structure of the Treasury Department, but on the entire executive process outlined in Biden’s order.

It is worth noting that the phrase “US values” featured six times as a guiding star for US policy in a Treasury Department statement.

But what are these values? Monetary policy has been raising fiercely debated, persistently unresolved questions about American values ​​ever since Thomas Jefferson and Alexander Hamilton fell out over the First Bank of the United States.

And more than at any time in US history, the definition of American values ​​is now hotly contested. How do politicians weigh the trade-offs between privacy and the fight against terrorism? US financial dominance and national sovereignty?

In short, what “US values” will take precedence in US digital asset policy? We and the Ministry of Finance should be aware.

It’s been a tough spring and summer for stablecoins – cryptocurrencies, the value of which is tied to already existing currencies or goods, sometimes supported by an algorithm – with famous Terra collapse round invitation unwanted scrutiny by regulators.

POLITICIAN Sam Sutton reports today on a blockchain platform that actively discloses information: Paxos, which announced this morning its monthly financial statements on the stablecoins offered, will go into more detail by releasing an identification number that will allow anyone to view the composition of the assets. that support these coins.

Paxos stablecoin offerings, USDP and BUSD, are not as widespread as big industry companies like Tether or Circle, but the move reflects real concern about the impact such products could have on the fiat money market. Some stablecoins are backed by traditional assets such as treasury bills. led legislators and Ministry of Finance similarly, to examine the lack or absence of their normative status. – Derek Robertson

Remember the early days of the pandemic, when governors’ press conferences replaced the NBA playoffs as must-see television—and a casual remark from the governor of New Jersey. Phil Murphy on the state’s need for programmers fluent in the more than half-century-old COBOL programming language caused an uproar. worry round about the need to update long-outdated state IT systems.

Perhaps today’s programmers just needed to catch up. The newspaper “New York Times reported this week it is fashionable among some young programmers to learn COBOL, “the Latin language of programming code.” One 24-year-old engineer who taught the language himself told the newspaper that it has led to higher job offers than she expected, as software used in everything from government to financial services is still written in the language.

This is not the only old language that remains functional and widely used – last year the Government Accounts Chamber published a report to “legacy systems” in the federal government that deploy everything from assembly languages to Fortran. Quoting the CTO of Stack Overflow in a conversation with once as for what she called “uncool old languages,” the prevailing philosophy in government may still be “If it ain’t broken, don’t fix it.” – Derek Robertson

Stay in touch with the entire team: Ben Schrekinger ([email protected]); Derek Robertson[email protected]); Konstantin Kakaes (ur.[email protected]); and Heidi Vogt ([email protected]). Follow us on Twitter @DigitalFuture.

Ben Schrekinger writes for POLITICO on technology, finance and politics; he is a cryptocurrency investor.

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