{"id":9796,"date":"2025-09-04T14:59:11","date_gmt":"2025-09-04T14:59:11","guid":{"rendered":"https:\/\/bitunikey.com\/news\/u-s-is-considering-using-stablecoins-as-a-surveillance-tool\/"},"modified":"2025-09-04T14:59:23","modified_gmt":"2025-09-04T14:59:23","slug":"u-s-is-considering-using-stablecoins-as-a-surveillance-tool","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/u-s-is-considering-using-stablecoins-as-a-surveillance-tool\/","title":{"rendered":"U.S. is considering using stablecoins as a surveillance tool"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">The U.S. government is demonstrating respect for privacy and prefers stablecoins over central bank-issued digital assets. President Donald Trump restricted the development of CBDCs, citing privacy concerns. However, the Treasury Department and the Bank of International Settlements are already exploring ways to turn stablecoins into a handy surveillance tool.\u00a0<\/p>\n<div id=\"cn-block-summary-block_0953c727a10d697d80d9ebbe6ef9e440\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>Although the U.S. opposed the creation of CBDCs due to potential privacy violations, the Treasury Department is exploring possibilities to analyze blockchain monetary data.<\/li>\n<li>The Bank of International Settlements\u2019 economists suggested the use of an AML compliance score. Critics compare them to the Chinese social credit system.<\/li>\n<li>Analysts from a16z suggest there is no fighting on-chain illicit activity without compromising privacy.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<div class=\"wp-block-rank-math-toc-block\" id=\"rank-math-toc\">\n<p>Table of Contents<\/p>\n<nav>\n<ul>\n<li><a rel=\"nofollow\" target=\"_blank\" href=\"#the-u-s-treasury-department-is-seeking-to-monitor-stablecoin-transactions\">The U.S. Treasury Department is seeking to monitor stablecoin transactions<\/a><\/li>\n<li><a rel=\"nofollow\" target=\"_blank\" href=\"#privacy-vs-security\">Privacy vs. security\u00a0<\/a><\/li>\n<li><a rel=\"nofollow\" target=\"_blank\" href=\"#take-on-deanonymizing-stablecoin-transaction-data-from-the-bis-economists\">Take on deanonymizing stablecoin transaction data from the BIS economists<\/a><\/li>\n<li><a rel=\"nofollow\" target=\"_blank\" href=\"#digital-id-contradicts-previous-actions-of-the-trump-administration\">Digital ID contradicts previous actions of the Trump Administration<\/a><\/li>\n<\/ul>\n<\/nav>\n<\/div>\n<h2 class=\"wp-block-heading\" id=\"the-u-s-treasury-department-is-seeking-to-monitor-stablecoin-transactions\">The U.S. Treasury Department is seeking to monitor stablecoin transactions<\/h2>\n<p>The Department of the Treasury is exploring opportunities to access transaction data of stablecoins. In the request for public comment <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.federalregister.gov\/documents\/2025\/08\/18\/2025-15697\/request-for-comment-on-innovative-methods-to-detect-illicit-activity-involving-digital-assets\" rel=\"nofollow\">released<\/a> on Aug. 18, the Treasury Department invites \u201cinterested members of the public\u201d to discuss possible ways (methods and techniques) to \u201cdetect and mitigate illicit financial risks involving digital assets.\u201d The request is signed by executive secretary Rachel Miller. The Treasury Department accepts comments from the public until Oct. 17, 2025.<\/p>\n<p>According to Miller, the reason for allowing the government to access the monetary information is to fulfill the requirements set by the GENIUS Act. The GENIUS Act was <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/07\/fact-sheet-president-donald-j-trump-signs-genius-act-into-law\/\" rel=\"nofollow\">signed<\/a> by President Donald Trump into law on Jul. 18, 2025. The law sets the legal framework for stablecoin issuers and protects consumers from potential misconduct.\u00a0<\/p>\n<p>Since the GENIUS Act treats stablecoin issuers as financial institutions, all the federal laws applicable to such institutions are now relevant to stablecoins.<\/p>\n<p>Miller highlighted several directions for potential data monitoring (mostly, this data is associated with AML functionality, sanctions compliance, and identity checks). These include application programming interfaces, AI-based solutions, identity verification, etc.\u00a0<\/p>\n<p>The document specifically seeks recommendations on overcoming regulatory, operational, and legislative obstacles to using identity verification to detect illegal activity. Additionally, it requests recommendations on integrating blockchain data with off-chain information and asks what the main challenges are for using blockchain analytics. While Miller mentions privacy protection, these details reveal the U.S. Treasury\u2019s interest in the deanonymization of transaction data.\u00a0<\/p>\n<h2 class=\"wp-block-heading\" id=\"privacy-vs-security\">Privacy vs. security\u00a0<\/h2>\n<p>According to the former Chairman of the Commodities Futures Trading Commission, Timothy Massad, the Treasury is going to combat illicit activity by implementing zero-knowledge digital credentials for DeFi users. These credentials will obscure data from everyone, but the info will be available through requests of authorities. Without these credentials, smart contracts would not process transactions, <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=IXKLholMqwE\" rel=\"nofollow\">according<\/a> to Massad.<\/p>\n<p>In a piece dedicated to myths about privacy on blockchain, David Sverdlov and Aiden Slavin of a16z <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/a16zcrypto.com\/posts\/article\/6-myths-privacy-blockchains\/#section--5\" rel=\"nofollow\">suggested<\/a> that fighting illicit on-chain activity only goes at the expense of privacy violation. They list possible privacy concessions. Consumers will possibly have to provide voluntary and involuntary selective de-anonymization of transaction data in order to prove the legitimacy of transactions or stored funds. Other ways include withdrawal and deposit screenings.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<h2 class=\"wp-block-heading\" id=\"take-on-deanonymizing-stablecoin-transaction-data-from-the-bis-economists\">Take on deanonymizing stablecoin transaction data from the BIS economists<\/h2>\n<p>On Aug. 13, 2025, the Bank of International Settlements economists <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.bis.org\/publ\/bisbull111.htm\" rel=\"nofollow\">released<\/a> a piece titled \u201cAn approach to anti-money laundering compliance for cryptoassets.\u201d\u00a0<\/p>\n<p>In the piece, the authors state that the existing reliance on trusted intermediaries in anti-money laundering doesn\u2019t work well with decentralized public blockchains. They believe that the blockchain data should be analysed closely to fight money laundering.\u00a0<\/p>\n<p>The piece contains a proposal to create an AML compliance score based on the likelihood of the transacted tokens\u2019 involvement in illicit activity. The score may be used to block or limit transactions in the crypto-to-fiat conversions through banks. The Rage journalist, Lola Leetz, <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.therage.co\/treasury-digital-identity-defi\/\" rel=\"nofollow\">claims<\/a> that the implementation of digital IDs for blockchain-based services will turn permissionless networks into permissioned ones.<\/p>\n<p>ZeroHedge media compares AML compliance score to Chinese social credit points. It <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.zerohedge.com\/geopolitical\/quiet-rebranding-cbdcs-digital-id\" target=\"_blank\" rel=\"nofollow\">claims<\/a>:<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cNone of [this] should surprise anybody (unless you really believed that there would be no CBDCs in the US). We\u2019ve long said we expect the on-ramps and off-ramps to be heavily regulated and KYC-ed as the crypto-economy becomes a bigger component of the global financial system.\u201d<\/p>\n<\/blockquote>\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">The BIS proposal for AML \u201ccompliance scores\u201d on cryptoassets dresses up an old idea in new tech. It\u2019s the same subjective risk-based approach that has failed in traditional finance, now applied to blockchain data. <br \/>The result? A system that could fracture fungibility, split\u2026<\/p>\n<p>\u2014 melaviola (@MartinaG2702) <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/MartinaG2702\/status\/1955621123447546068?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">August 13, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<h2 class=\"wp-block-heading\" id=\"digital-id-contradicts-previous-actions-of-the-trump-administration\">Digital ID contradicts previous actions of the Trump Administration<\/h2>\n<p>President Donald Trump prohibited the development, issuance, and circulation of the digital dollar via <a rel=\"nofollow\" target=\"_blank\" target=\"_blank\" href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2025\/01\/strengthening-american-leadership-in-digital-financial-technology\/\" rel=\"nofollow\">executive order<\/a> on Jan. 23, 2025. Thus, the world\u2019s reserve currency was blocked from becoming digital. While USD stablecoins are pegged to the American dollar\u2019s price, digital dollars would have been actual tokenized dollars.\u00a0<\/p>\n<p>The CBDC ban was mainly explained by the government\u2019s concern over individual privacy, which could have been violated if the U.S. allowed the creation of the digital dollar.\u00a0<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">We chatted about the implications of the GENIUS Act with Crypto Dad <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/giancarloMKTS?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">@giancarloMKTS<\/a> who has called out the loss of privacy in stablecoins:<\/p>\n<p>Why block a US CBDC while also passing the GENIUS Act to impose similar surveillance among private stablecoin issuers? \ud83c\uddfa\ud83c\uddf8\u23ec <a rel=\"nofollow\" target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/t.co\/LOgF5uuAO1\">pic.twitter.com\/LOgF5uuAO1<\/a><\/p>\n<p>\u2014 Coinage (@coinage_media) <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/coinage_media\/status\/1959649880931991856?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">August 24, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<p>USD stablecoins are presented as a private alternative to CBDCs, as stablecoins are not directly affiliated with the government. However, it seems that the U.S. government doesn\u2019t mind having a tool for financial surveillance.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<\/p><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. government is demonstrating respect for privacy and prefers stablecoins over central bank-issued digital assets. President Donald Trump restricted the development of CBDCs, citing privacy concerns. However, the Treasury&hellip;<\/p>\n","protected":false},"author":1,"featured_media":9310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/9796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=9796"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/9796\/revisions"}],"predecessor-version":[{"id":9797,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/9796\/revisions\/9797"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/9310"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=9796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=9796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=9796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}