Cryptocurrency and corruption, a task force in the US

Cryptocurrencies are once again in the crosshairs of the Biden administration, this time because of the risk of corruption. The US will have a special task force to counter this illicit use. A White House report reveals this.

The need to fight corruption

The United States Strategy on Countering Corruption report contains a study on corruption in the United States and strategies to combat it. 

The report states that the fight against corruption is one of the pillars of the Biden administration. Last June, the President of the United States himself wrote:

“Corruption threatens United States national security, economic equity, global antipoverty and development efforts, and democracy itself….[B]y effectively preventing and countering corruption and demonstrating the advantages of transparent and accountable governance, we can secure a critical advantage for the United States and other democracies”.

Cryptocurrencies and digital assets are also part of this scenario. 

Cryptocurrencies and anti-corruption, the strategy of the US

In particular, a special task force will be set up to fight crypto-related corruption. It will be called the National Cryptocurrency Enforcement Team. It will focus on complex investigations and prosecutions of abuses by crypto criminals or illegal acts committed using crypto exchanges, mixing and tumbling services (those used to “launder” cryptocurrencies resulting from criminal activities). It will also pursue money laundering activities.  

Beware of digital assets

The report announces (for the umpteenth time) the arrival of regulation on digital assets. The White House clearly writes that the US will continue to watch digital assets, including the corruption risks related to them, and will strive to: 

“Refine policies and regulations as needed”. 

In this context, the US is prepared to develop CBDCs. The report reads: 

“As appropriate, the United States will engage

countries to help with the analysis and development of central bank digital currencies in a manner consistent with stability, consumer and investor protection, and countering illicit finance”.

This means that a Central Bank Digital Currency could be an asset in the fight against corruption insofar as it has some peculiarities typical of cryptocurrencies, but is centralized. Indeed, it is directly controlled by the state. 

Cryptocurrencies, the report explains, have shown their full potential as an alternative to money and their use is growing worldwide. But they have also proven to be a tool for illegal activities such as ransomware attacks, human and drug trafficking, fraud, corruption and evasion of sanctions. These are activities that do not even disdain the dollar in reality. 

The road is marked out and there are two directions to take: countering illegal activities with a task force, and encouraging the use of centralized digital currencies. As well as improving the regulatory framework, something that is always brought up but not yet achieved.