The Bank Policy Institute, a banking advocacy group in the United States, has expressed its support for legislation proposed by Senator Elizabeth Warren that aims to increase transparency in digital assets to combat financial crime. The bill, titled the “Digital Asset Anti-Money Laundering Act of 2023,” was reintroduced by Warren on July 28, after originally being introduced to the U.S. Senate in December 2022.
Warren made the announcement about the bill alongside Democrat Joe Manchin from West Virginia, Republican Roger Marshall from Kansas, and Republican Lindsey Graham from South Carolina. The Bank Policy Institute has voiced its support for the bill, which calls for more transparency in digital asset transactions in an effort to combat money laundering and terrorism financing. The institute emphasized that the existing anti-money laundering framework does not adequately address digital assets and stated, “The existing anti-money laundering and Bank Secrecy Act framework must account for digital assets, and we look forward to engaging in this process to defend our nation’s financial system against illicit finance in all its forms.”
If passed, the seven-page bill would require digital-asset wallet providers, miners, and others involved in validating and securing transactions on a blockchain to keep records of their customers’ identities. The legislation would also prohibit financial institutions from using digital asset mixers, such as Tornado Cash, that are designed to hide blockchain data. The Massachusetts Bankers Association, AARP, the National Consumer Law Center, and the National Consumers League are among the other supporters of the bill.
Not everyone is in favor of Warren’s proposed legislation. Tyler Winklevoss, co-founder of crypto exchange Gemini, took to Twitter to express his opposition, suggesting that those who oppose the bill are “doing the right thing.”
Related Post
Warren initially introduced the bill at a Senate Banking Committee hearing in December 2022, during a discussion on the FTX Bubble Burst and the Harm to Consumers. At the hearing, she made it clear that she believes crypto should be subjected to the same regulations as traditional banking institutions. She stated, “Senator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker, and Western Union all have to follow today.”
This legislation comes at a time when the crypto industry is facing increased scrutiny and regulatory pressure. Governments around the world are beginning to recognize the need for regulations to prevent illicit activities using digital assets. By introducing this bill, Warren and her supporters aim to address this issue by ensuring that digital asset transactions are subject to the same anti-money laundering rules as traditional financial transactions.
While there is broad support for the goal of combating financial crime, some critics argue that the proposed regulations may hinder innovation and impose unnecessary burdens on businesses in the crypto industry. They argue that there are already mechanisms in place to address money laundering and terrorist financing, and that additional regulations may stifle the growth and development of the digital asset market.
Overall, the proposed legislation by Senator Elizabeth Warren to increase transparency in digital assets and combat financial crime has garnered support from the banking advocacy group Bank Policy Institute and other organizations. If passed, the bill would require digital asset service providers to keep records of customer identities and prohibit the use of certain tools designed to hide blockchain data. While there is support for the goal of combating illicit finance, there are also concerns about the potential impact on innovation and the growth of the crypto industry. As the bill progresses, it is likely to spark further debate and discussion among stakeholders in the crypto ecosystem.
