US Digital Identity Push Key to Crypto Dominance

The White House has identified digital identity systems as foundational for establishing U.S. dominance in cryptocurrency markets. A new report highlights the need for Congress to expand CFTC oversight and create regulatory sandboxes for DeFi innovation, contrasting current policies with alleged ’Operation Choke Point 2.0’ banking restrictions.

While acknowledging crypto’s potential for illicit use, the administration cites industry data showing less than 1% of transactions involve criminal activity. The report promotes dollar-backed stablecoins for modernizing payments but opposes central bank digital currencies, advocating instead for private-sector solutions like mobile driver’s licenses and Zero Knowledge Proofs for privacy-preserving verification.

Treasury Department recommendations include adopting NIST’s digital identity guidelines and launching an RFI under the GENIUS Act to explore anti-money laundering technologies. The approach diverges from EU regulators who view crypto as high-risk for financial crimes, emphasizing America’s focus on innovation-friendly frameworks.

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