The U.S. Treasury is calling for public input on "innovative or novel" technology methods to detect and prevent the illegal use of cryptocurrency. This move aims to comply with provisions of the recently passed #GENIUS .
Technology focus
The Treasury Department is focusing on four key areas: application programming interfaces (APIs), artificial intelligence (AI), digital identity verification, and monitoring #blockchain . They want to understand how these solutions can help regulated entities detect illegal activities while assessing privacy risks.
After gathering feedback, the Treasury Department will compile it into a report to Congress, which will then shape future guidelines and legislative proposals.
Balancing privacy and compliance
Industry experts believe it is possible to achieve a balance between privacy and compliance. Solutions such as zero-knowledge proofs and reusable KYC information have been proposed. These technologies allow for user verification without disclosing sensitive personal data, thus protecting privacy while ensuring compliance with KYC/AML regulations.
Despite concerns that new regulations may be too strict, most experts remain optimistic. They hope the industry will propose effective solutions that enable DeFi to attract institutional capital and become a part of the real economy without sacrificing its core principles. #anhbacong
