Trump's Proposed Budget Snubs Blockchain, Crypto in Crosshairs of Security Service

Earlier this week, the word "Cryptocurrency" made it to the text of one of the United States government's most consequential strategic documents: the Trump administration's budget proposal for the 2021 fiscal year.

Combined with other recent policy moves, such as the proposed allocation of funds to build the Financial Crimes Enforcement Network's "Virtual Currency and Cyber Threat Mitigation Program" and Treasury Secretary Steven Mnuchin's announcement of "Significant new requirements" for cryptocurrency, the budget proposal attests to the current administration's resolve to treat digital money as a security threat above all else.

The politics of presidential budget proposalsThe formal federal budget process begins with the president collecting funding requests and their justifications from executive agencies.

Finally, the need for Congress to obtain the president's signature on the ultimate budget bill puts the executive branch in the bargaining position where it can leverage veto threat to ensure that sufficient share of the president's demands are met.

In sum, not only does the presidential budget proposal reflect the administration's policy preferences and goals, but it also foreshadows measures that are highly likely to materialize.

Beefing up the TreasuryThe part of President Trump's budget proposal that uneased the digital currency space concerns the Department of the Treasury.

The 2.2% increase in the revenue department's backing stands in contrast with proposed cuts to other agencies' budgets, including the State Department and the Commerce Department.

The initiative appeared in the budget proposal even though a conclusion was already reached earlier in January by a working group consisting of officials from several executive agencies.

If Congress approves the transfer between the two departments, the Secret Service will join another agency with a similar mission of fighting financial crime within the Treasury: the Financial Crimes Enforcement Network, or FinCEN. In its own congressional budget justification for fiscal 2021, the latter bureau requested to allocate three employees and $819,000 for what is called the Virtual Currency and Cyber Threat Mitigation Program.

Coming on the heels of a wave of publicity surrounding Trump's budget proposal, yet another announcement left little doubt concerning the administration's mounting scrutiny of digital money.