US lawmakers have proposed an amendment to the State Department’s Fundamental Powers Act of 1956 that would include information on cryptocurrency rewards and payments.
The proposed amendment under the National Defense Authorization Act (NDAA) would require the Department of State, an executive department of the US federal government responsible for the country’s foreign policy and relations, to report any crypto reward payments or rewards within 15 days of making them.
NDAA is the name for each series of US federal laws that determine the annual budget and expenditures of the US Department of Defense.
Text of the official document:
“Not later than 15 days before an award is offered in a form that includes cryptocurrency, the Secretary of State must notify the House Committee on Foreign Affairs and the Senate Foreign Relations Committee of such form to receive the rewards.”
Aside from the 15-day information period, the State Department must also file a report with the House Foreign Affairs Committee and the Senate Foreign Relations Committee within 180 days of enactment of the law, justifying the use of cryptocurrencies as rewards.
The report must include evidence indicating that crypto rewards will encourage more whistleblowers to apply compared to “other rewards paid with US dollars or other forms of money or non-monetary items.”
Related: US Ethical Advice on Cryptocurrency to Federal Employees Has Legislative Basis
The said report should also examine whether the use of cryptocurrency can provide bad actors with “hard-to-trace funds that can be used for 16 criminal or illicit purposes.”
The proposed amendment could provide more transparency into the State Department’s spending on cryptocurrency rewards. Once the policy is passed, it can also provide insight into the federal government’s views on the use of cryptocurrencies for illicit activities, which is a primary argument used by policymakers against cryptocurrencies.
The Biden government published the “first ever” comprehensive framework for cryptocurrency in September this year following Biden’s executive order in March. The framework presented six major directions for crypto regulation in the United States. The framework is the sum of 9 different reports on cryptography over the years combined together