U.S. Treasury Proposes AI and Digital Identity Framework for Crypto Regulation The Treasury Department has released a new report to Congress arguing that cryptocurrency can coexist safely with existing financial safeguards through enhanced monitoring and user identification. Rather than banning digital assets, the government proposes four technological pillars to strengthen oversight: artificial intelligence, digital identity systems, blockchain analytics, and interoperable data-sharing APIs. Treasury Secretary Scott Bessent's report identifies lack of transparency as crypto's primary risk, not the technology itself. The strategy aims to leverage AI to detect complex money laundering patterns that traditional systems miss, including chain-hopping across blockchains and multi-wallet structuring.
