The U.S. Department of Commerce Mulls Over The Bitcoin Institute Report On Digital Assets

The U.S. is considering giving the crypto-asset industry the support it needs following the executive order issued by President Joe Biden.

To further drive the government’s commitment to adopt digital assets, the International Trade Administration must solicit public feedback.

The Department of Commerce Received a Report from the Bitcoin Institute

The Bitcoin Institute is looking to collaborate with relevant government entities to discuss how digital assets can advance the economic policies of the United States. As a result, the institute has submitted a report titled “Digital Asset Competitiveness” to the Department of Commerce.

According to the report’s content, the United States should adopt an open monetary system to accelerate America’s economic interests. 

Moreover, the research paper also touches on the U.S. objectives of comprehensive financial inclusion and consumer protection. It further examines the implications of low financial inclusion on the economic policies of the U.S. government.

The emphasis of the paper is on the flagship cryptocurrency, Bitcoin. Furthermore, the paper also examined concerns about Bitcoin mining, energy consumption, and the benefits of crypto-assets.

Promoting Financial Inclusion

The Bitcoin Policy Institute points to the Federal Reserve’s report, which estimates that about 19% of U.S. citizens are unbanked. The Fed also analyzed the high-interest rates among U.S. adults with low incomes and less education.

The report also talked about the transaction fees needed to process transactions. Accordingly, the percentage of fees paid by customers ranges between 1.5% and 3.5%, covering credit card processing and other charges.

In contrast to fiat, cryptocurrencies offer lower transaction fees and faster processing. Crypto-assets have removed the centralized intermediaries and allowed for the direct transfer of funds. The continued use of innovative technologies like the Lightning Network has made crypto-asset transactions more cost-effective and faster.

As a result, cryptocurrency will lower the bar, promote large-scale financial inclusion, and allow underbanked or unbanked Americans access to transactions. Insofar, the broad U.S. financial system will benefit from the participation of more Americans in the financial sector. 

However, as commendable as the initiative is, the traditional financial institutions stand to lose. The lower transaction fees in digital asset transactions will significantly reduce the influence of conventional institutions in the financial landscape.

Detecting Financial Crimes with Bitcoin

The released paper also stated that the flagship digital currency is the most open among others. The openness of Bitcoin would provide law enforcement bodies with the tools to detect and trace illegal transactions.

Cryptocurrency has the lowest money laundering rate among transaction mediums like fiat. 

As regulators continue strengthening their anti-money laundering laws, Bitcoin could go a long way to prevent illicit funding for crime or drug-related activities. 

More importantly, the research mentioned the controversial Proof-of-Work (PoW) protocol in the report. The research noted that PoW mining would continue to be used in the industry, especially by crypto miners.

The research further maintained that Bitcoin could be critical in accelerating economic growth and promoting the expansion of green energy sources.