Dear Ms. Lascar:
The Clearing House Association[1] and the Bank Policy Institute[2] (collectively, the “Associations”) appreciate the opportunity to provide comments in response to the Department of the Treasury’s request for information on illicit finance issues relating to digital assets. The Associations strongly support the goals of the Bank Secrecy Act (BSA) and the continued evolution of the U.S. regulatory framework to ensure that financial institutions can effectively mitigate illicit finance risks while enabling responsible innovation in the digital asset ecosystem. An important component of this is understanding that both traditional financial institutions and digital asset-native companies must abide by their BSA and Office of Foreign Asset Control (OFAC) obligations when participating in and supporting the evolving digital asset ecosystem.
The Associations support activity-based regulation guided by the principle of “same activity, same risk, same rules.” We believe that financial institutions and new entrants alike must meet comparable regulatory expectations, supervised by the same regulator, and categorized similarly under applicable law. A level playing field will promote competition, innovation, and financial stability while addressing financial crime threats from drug cartels and nation state adversaries. Financial institutions are eager to offer digital asset services and to responsibly bank digital asset- native companies, but inconsistent and unclear regulatory standards and supervisory expectations risk stifling these opportunities.
To read the full comment letter, click here, or click on the download button below.
[1] The Clearing House Association L.L.C., the country’s oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the U.S., clearing and settling more than $2 trillion each business day.
[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
