A bipartisan group of Senators introduced a new bill late last month that would require travelers to declare their digital currency holdings at all ports of entry into the United States. Senate bill S.1241 – the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017” – was introduced by Iowa Senator Chuck Grassley, and was co-sponsored by Senators Sheldon Whitehouse, John Cornyn, and Diane Feinstein.
The bill includes language that directs the Secretary of the Department of Homeland Security to collaborate with the U.S. Customs and Border Protection agency to develop systems and strategies to identify and “interdict” cryptocurrency assets owned by travelers entering the United States:
“(c) Customs And Border Protection Strategy For Prepaid Access Devices.—Not later than 18 months after the date of enactment of this Act, the Secretary of Homeland Security, in consultation with the Commissioner of U.S. Customs and Border Protection, shall submit to Congress a report—
(1) detailing a strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States; and
(2) that includes an assessment of infrastructure needed to carry out the strategy detailed in paragraph (1).”
Current U.S. law already requires travelers to inform Customs when they are carrying amounts greater than $10,000 – though that requirement does not apply when those holdings consist of overseas funds or precious metals held abroad. Proponents of this bill argue that it is necessary because digital currencies are technically carried with their owners at all times. Some critics have observed that the same can be said of today’s fiat currencies, thanks to the convenient nature of modern electronic banking.
Meanwhile, many will no doubt wonder why anyone in Congress would prioritize something like this when there are so many real problems that need to be addressed. Issues like tax reform, excessive regulation. and rising health insurance premiums continue to be unresolved. The list of real problems is seemingly endless, so it’s only natural for some to question why elected officials would choose to focus their energy or time on this issue.
It’s also important to note that any enforcement infrastructure capable of detecting these digital currency holdings is almost certain to offend the sensibilities of much of the crypto community. That infrastructure could include anything from increased government tracking of blockchain activity to enhanced regulatory authority to identify cryptocurrency owners. It will also likely include strong penalties for those who fail to disclose their holdings.