American higher financial institutions like Financial Crimes Enforcement Network (FinCEN) and Federal Reserve (Fed) showed an interest in transforming digital currency into legal fiat money. Such a step opens much wider opportunities for ruling bodies to control all the related transactions while also gives more maneuvers for digital assets in the legal field. Such an adoption can change the role of virtual currencies and crypto-assets in the global financial system.
The latest financial news is usually dedicated to amounts of money related to economic transactions. The regarded topic lacks figures but opens a wide discussion in terms of regulation and functioning of the substantial financial systems.
What will change after digital money receives official status?
The initiative of the US Fed and FinCEN has many aspects to discuss. Thus, the idea of adding digital assets to the general financial system seems to be a natural process as virtual money has already become an integral part of recent transactions. Giving national recognition to digital money will make it a legal value, which leads to better control and less vulnerable fluctuations.
However, the US economic institutions also asked for some changes. Thus, FinCEN and the Fed are asking for decreasing the cross-border report limit to $250. Recently, all the international transactions lower than $3000 can be not reported while adopting virtual currencies can significantly change the limits.
Another essential element of the upcoming initiative lies in the plain of terminology. Since digital assets are widely used, the term ''money'' should be reviewed to bring more clarity. Such aspects are especially important for the legal system, where every word and definition can change the controversial situation resolving.
All in all, the US starts a quite unique and vital process related to digital currencies. Indeed, it will influence global economic relations. However, this process is inevitable, while such a step should be made rather careful not to set a negative precedent.