United States federal agencies are looking to update the definition of “money” to accommodate cryptocurrencies. The aim is to strengthen reporting requirements to cater to all crypto transactions, including domestic and cross-border.
According to a semiannual regulatory agenda from the Department of the Treasury, the Board of Governors of the Federal Reserve System and the Treasury’s Financial Crimes Enforcement Network (FinCEN) want to “collect, retain, and transmit” information on these funds transfers.
If finalized, the new rule will likely cover all crypto holders that transact digital assets regardless of their specific purpose or application. While some users spend crypto as a medium of exchange, others find the crypto with the most potential for investment reasons to profit from potential price spikes in the crypto market.
“The Agencies intend that the revised proposal will ensure that the rules apply to domestic and cross-border transactions involving convertible virtual currency, which is a medium of exchange (such as cryptocurrency) that either has an equivalent value as currency, or acts as a substitute for currency, but lacks legal tender status.”
The Fed and FinCEN are subsuming cryptocurrencies under these reporting rules, even though they do not have legal tender status. Although neither agency has provided further details, the final notice for the proposed rule is September 2025.
In June, the Treasury Department and the Internal Revenue Service (IRS) issued tax reporting guidelines for crypto brokers. According to an official IRS press release, custodial brokers must report crypto sales and exchanges.
The rules specify brokers taking possession of crypto sold by customers. The brokers may include crypto kiosks, wallet providers, custodial trading platforms, and certain digital asset payment processors. Interestingly, these regulations do not include non-custodial or decentralized brokers. The IRS and the Treasury intend to set separate rules for this category of brokers.
The new rules also extend to real estate professionals, as they are expected to report the fair market value of all crypto paid and received by sellers and buyers in real estate transactions. Also, the final regulations offer an optional reporting method for certain stablecoin and non-fungible token (NFT) sales that exceed specified thresholds.
The US government is still running large Bitcoin transactions and recently transferred $10,000 worth about $593.5 million on August 14. An X post from blockchain analytics firm Arkham Intelligence states the funds are part of crypto associated with Silk Road, a dark web marketplace popular for illegal activities, including money laundering and drug trafficking. In July, the government also moved 30,000 Bitcoin, worth about $2 billion, to an unknown address.
The US has long been heavily criticized for being largely unsupportive of the crypto sector. Many enthusiasts believe the US is far behind while other countries are actively working on crypto support, including the potential issuance of a central bank digital currency (CBDC). Nonetheless, the Federal Reserve is positive on dollar-denominated digital assets.
In February, a member of the Board of Governors said increased usage and adoption of dollar stablecoins could benefit the dollar’s position as the world’s dominant currency. At an event in the Bahamas, Christopher Waller spoke on the increased adoption of decentralized finance (DeFi), adding that DeFi is good for the US because the sector heavily relies on dollar-backed stablecoins. Waller said an expansion in trading activity in the DeFi industry “will simply strengthen the dominant role of the dollar.”
Part of the criticism directed against the US is its seemingly preferred method of enforcement action. Over the years, several agencies, especially the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), have sued major cryptocurrency giants, including Coinbase and Binance.
For instance, the case between Coinbase and the SEC recently took a new turn when the Commission filed a motion to prevent the exchange from accessing a wide array of documents as part of a discovery process. The agency says it has so far produced more than 240,000 documents for the case and is in the process of reviewing an additional 117,000.
On the other hand, Coinbase’s Chief Legal Officer Paul Grewal has defended the exchange’s request, stating that the documents will help with their defense. According to Grewal, Coinbase believes the SEC owes the public transparency if it has decided to “engage in an unprecedented regulation by enforcement campaign.” The case between both entities began in June 2023 when the SEC sued Coinbase, accusing the exchange of operating as an unregistered securities broker for over four years.
