As Bitcoin continues to soar to new heights, Washington seems to be preparing to follow countries like Russia and China in preparing to increase their influence on cryptocurrency.
Today outgoing New York Federal Reserve head William Dudley revealed that the Federal Reserve is investigating its own “digital currency”, though it would be “premature” to suggest that we will see a “crypto-dollar” anytime in the near future.
Far more important is Congress looking into updating its Anti-Money Laundering laws to include crypto-currencies. The Senate Judiciary committee held a hearing yesterday on the topic, as it continues to consider S.1241, a bill that would explicitly apply ”digital currency” to Federal scrutiny. It also requires Federal law enforcement to create a “ strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States.”
While the very nature of cryptocurrency may shield savvy users from enforcement, it would be interesting to see how such legislation would impact such laws would have on crypto-exchanges, as well as public demand for Bitcoin and other cryptocurrencies.
As I noted a few months ago, the more governments and central banks view cryptocurrency as a threat, the more likely we are to see them try to tighten their control of exchanges as part of a large goal of replacing private cryptocurrency with their own state-controlled tokens.
