US Considers Applying Fiat Reporting Requirements to Crypto Transfers

The US Department of the Treasury (DOT) announced on August 16 that it plans to revise the definition of "money" to enhance reporting requirements for cryptocurrencies. This initiative, in collaboration with the Board of Governors of the Federal Reserve System (FRS) and the Financial Crimes Enforcement Network (FinCEN), aims to bring digital currencies into the scope of existing financial regulations.

A snippet of the semiannual regulatory agenda issued by the US Department of Treasury. Source: Federal Register documents

New Reporting Requirements

The proposed changes are designed to ensure that the rules apply to both domestic and international cryptocurrency transactions. The revised definition will include convertible virtual currencies—cryptocurrencies that have value similar to or serve as a substitute for legal tender but are not themselves recognised as legal tender. Additionally, the new regulations will cover digital assets with legal tender status, such as central bank digital currencies (CBDCs).

The final notice for this proposed rulemaking is expected in September 2025, pending clearance.

Recent Developments in Cryptocurrency Regulation

On August 14, the US government transferred approximately 10,000 Bitcoin (BTC) related to an old Silk Road case. This move underscores ongoing efforts to regulate and monitor cryptocurrency activities.

Transaction information of the US government moving BTC. Source: Arkham Intelligence

DOJ's AI Regulation Update

In a separate development, the Department of Justice (DOJ) has requested the United States Sentencing Commission to update its guidelines on crimes involving artificial intelligence (AI). Announced on August 7, the DOJ’s proposal seeks to impose additional penalties for crimes facilitated by AI or even basic algorithms, aiming to address the growing intersection of technology and crime.