The US Treasury Department requests public comments on how digital identity tools and other emerging technologies could be used to combat illicit finance on cryptographic markets, an option incorporating identity checks into intelligent decentralized financing contracts (DEFI).
The consultation, published this week, stems from the new guide and the establishment of national innovation for the American stable law (Genius Act), signed in July.
The law, which defines a regulatory framework for payment payment issuers, orders the Treasury to explore new compliance technologies, including application programming interfaces (API), artificial intelligence, verification of digital identity and blockchain monitoring.
One of the ideas for the request for comments is the potential of DEFI protocols to directly integrate digital identity information directly into their code. As part of this model, an intelligent contract could automatically check the user’s identification information before running a transaction, effectively building your customer (KYC) and anti-flowage guarantees (AML) in blockchain infrastructure.
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Treasure: digital identifiers could reduce compliance costs
According to Treasury, digital identity solutions, which may include government identifiers, biometrics or portable identification information, could reduce compliance costs while strengthening confidentiality protection.
They could also facilitate financial institutions and challenge services to detect money laundering, terrorist funding or sanctions before escape before transactions.
The Treasury has also recognized potential challenges, including data confidentiality problems and the need to balance innovation with regulatory surveillance. “The Treasury welcomes the contribution to any question which, according to the commentators, is relevant for the efforts of the Treasury,” wrote the agency.
Public comments are open until October 17, 2025. After the consultation, the Treasury will submit a report to the Congress and may publish advice or offer new rules on the basis of conclusions.
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US banks warn against the stable output escape
Last week, several large American banking groups, led by the Bank Policy Institute (BPI), urged the congress to tighten the rules under the law on engineering, warning that an escape could allow stabbling issuers to bypass the restrictions on the payment of interests.
In a letter sent on Tuesday, BPI said that the gap could allow transmitters to associate with exchanges or affiliates to offer yields, undergoing the intention of the law. The group has warned that the uncontrolled growth of the stalls provided by the yield could trigger up to 6.6 billions of dollars of deposit outings with traditional banks, threatening access to credit for companies.
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