US federal agencies are planning to redefine 'money' to include crypto in reporting rules
Federal regulators aim to treat crypto and traditional currency equally for financial institution reporting.
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Key Takeaways
- US agencies aim to treat cryptocurrencies as traditional money for reporting purposes.
- Final rulemaking on crypto as money expected by September 2025.
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Several top US federal agencies are collaborating to revise the definition of “money” to strengthen reporting requirements for financial institutions handling domestic and cross-border cryptocurrency transactions.
The US Department of the Treasury’s semiannual regulatory agenda, released on August 16, reveals an upcoming federal effort to level the regulatory playing field for cryptocurrencies and traditional fiat currency. The Board of Governors of the Federal Reserve System and the Financial Crimes Enforcement Network intend to revise the meaning of “money” used in the Bank Secrecy Act.
According to the agenda, the agencies aim to ensure that the rules apply to transactions involving convertible virtual currency, defined as a medium of exchange that either has an equivalent value as currency or acts as a substitute for currency, but lacks legal tender status. The proposal will also extend reporting requirements to digital assets with legal tender status, including central bank digital currencies.
The final notice of proposed rulemaking is currently scheduled for September 2025, subject to clearance. This move comes as the US government recently shifted approximately 10,000 Bitcoin linked to a dated Silk Road raid on August 14.
In addition to crypto, the Department of Justice is actively amending regulations and legal mandates for artificial intelligence. On August 7, the DOJ asked the United States Sentencing Commission to update its guidelines to provide additional penalties for crimes committed with the aid of AI. These recommendations seek to expand beyond established guidelines and apply to any crime aided or abetted by simple algorithms.
In June, the US Supreme Court overturned the Chevron doctrine, significantly affecting the SEC’s regulatory authority over crypto policies.
In May, the US Treasury and IRS introduced new tax regulations for crypto brokers, requiring transaction reporting and record-keeping of token costs starting in 2026.
Earlier this month, Senators Wyden and Lummis criticized the DOJ’s treatment of crypto software services as equivalent to unlicensed money-transmitting businesses, highlighting potential conflicts with the First Amendment.
This regulatory push reflects the growing recognition of crypto and digital assets as significant components of the financial system. By aligning reporting requirements for crypto with those of traditional currency, regulators aim to enhance transparency and combat potential illicit activities in the crypto space.
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