The U.S. Treasury Department submitted a report to Congress on March 9, 2026—commissioned under the GENIUS Act—outlining four technological pillars to enhance transparency in cryptocurrency transactions: artificial intelligence for monitoring, digital identity for onboarding, blockchain analytics for tracing, and interoperable data-sharing APIs. It describes digital assets as key to U.S. innovation leadership while acknowledging lawful users' need for privacy tools like mixers on public blockchains, amid risks from illicit exploitation.
Treasury Secretary Scott Bessent's report emphasizes redesigning the crypto ecosystem for programmable compliance rather than bans, targeting transparency deficits that enable laundering over the technology itself. It sets a national goal of restoring U.S. leadership in digital assets, aligning with President Donald Trump’s executive order and a July 2025 review of mixer policies.
The four pillars include:
- AI for transaction monitoring: Detects advanced techniques like chain-hopping or wallet structuring, which evade traditional systems. A 2025 PYMNTS and Block report noted 68% of financial institutions boosted fraud-detection spending.
- Digital identity systems: Verified credentials from trusted providers integrate with blockchains and smart contracts, with NIST and international collaboration proposed for secure, interoperable standards balancing privacy and fraud prevention.
- Blockchain analytics: For fund tracing.
- Data-sharing APIs: Enabling institutional interoperability.
On privacy, the report states lawful users 'may leverage mixers to enable financial privacy' on public blockchains, which processed 3.8 billion successful transactions monthly in early 2025 (up 96% YoY). Examples include shielding personal wealth, business payments, or charitable donations from public view to avoid fraud or scrutiny.
However, criminals exploit mixers, bridges, and swaps to obscure illicit funds. Bridges received $1.6 billion from mixers since May 2020, including over $900 million to one linked to North Korean activity. Non-custodial mixers pose higher risks due to lack of operators providing data to authorities, unlike regulated custodial ones. The Treasury cited Lazarus Group hackers (tied to North Korea) laundering stolen exchange funds.
This comes amid debates on expanding KYC/AML for DeFi and providers via the Digital Asset Market Clarity Act (CLARITY bill) of 2025. Paradigm's Alexander Grieve warned it threatens open-source developers; Ray Dalio called CBDCs a 'controlling mechanism.'
Industry expert Andrew Balthazor of Holland & Knight noted crypto's unsolved criminal prevention issues. The approach supports adoption, with $1.7 billion inflows to spot bitcoin ETFs in late February-early March 2026.
