The Department of Treasury published its report to Congress on March 6 regarding innovative technologies to counter illicit finance involving digital assets, as required by the GENIUS Act. The report examines technologies such as artificial intelligence, digital identity, blockchain monitoring, analytics, and application programming interfaces. Coin Center responded to the Treasury’s request for comment in October 2025 and has now released its analysis of the report.
The topic is significant because it addresses how financial institutions can detect illicit activity like money laundering while balancing privacy concerns for users of digital assets. The Treasury’s report acknowledges the importance of privacy in digital identities but does not provide specific recommendations beyond indicating future guidance and collaboration with Congress.
Coin Center said that while the Treasury’s observations are encouraging, more work remains. "All in all, Treasury’s Report provides some encouraging observations but much work remains to be done," according to Coin Center. The organization highlighted that the report recommends Congress consider expanding Bank Secrecy Act (BSA) coverage within decentralized finance (DeFi), though it does not specify which actors should be included or address current legislative efforts protecting software developers from surveillance obligations.
Regarding digital identity solutions for stablecoin issuers, Coin Center noted that the Treasury will issue guidance for adopting verifiable credentials and work with Congress on legislation and funding for new tools. The organization emphasized its ongoing engagement with Treasury and reiterated its position that privacy-preserving technologies should be considered so stablecoin users are protected while issuers comply with regulations.
Coin Center also called for allowing stablecoins on privacy-preserving blockchains using zero-knowledge proofs to protect transaction details without sacrificing oversight. It urged investigation into portable, attribute-based digital identity systems that allow compliance without exposing unnecessary personal data. The group said these approaches could improve efficiency and security compared to traditional identification methods.
On DeFi, Coin Center opposes mandates requiring digital identity where there is no existing obligation under know-your-customer rules or legitimate business reason for collecting identities. The organization warned against expanding BSA obligations to software developers or individuals who do not act as intermediaries.
Coin Center functions as an independent non-profit research and advocacy organization dedicated to cryptocurrency policy according to its official website. It promotes values such as open standards, federated trust, personal privacy, and individual freedom in both digital identity and cryptocurrency policy arenas according to the official website. Peter Van Valkenburgh leads Coin Center as executive director alongside a team covering policy areas including consumer protection, financial surveillance, innovation, investor protection, autonomy, tax policy through advocacy and litigation according to the official website.
Looking ahead, Coin Center said it will continue working with Treasury and Congress on advancing privacy-preserving technologies through projects like its John Hancock Project. "As much as these new technologies can offer improved privacy while addressing AML risks," Coin Center said in conclusion, "it is equally important that Treasury not extend BSA obligations to those who are not acting as intermediaries... Instead, Congress should focus on passing market structure legislation with proper distinctions between software developers and intermediaries."
