US Congress makes first amendment in 50 years! Bank secrecy threshold raised to $30,000, Virtual Money exchanges benefit.

A bill called the STREAMLINE Act was introduced by U.S. Senators led by Senate Banking Committee Chairman Tim Scott to modernize the Bank Secrecy Act. The bill raises the currency transaction report (CTR) threshold from $10,000 to $30,000 and requires the Treasury Department to adjust these amounts every five years to reflect Inflation. U.S. virtual money exchanges must also comply with the Bank Secrecy Act.

Background of the first major revision of the Banking Secrecy Law in 50 years

(Source: US Senate Gov)

The Bank Secrecy Act, passed in 1970, requires banks, credit unions, and other financial institutions to assist federal authorities in detecting and preventing financial crimes, including money laundering, terrorist financing, and related illegal activities. This legislation forms the basis of the anti-money laundering (AML) framework in the United States and has been a cornerstone of the U.S. financial regulatory system for the past half-century.

However, since its enactment in 1970, the reporting threshold of the Bank Secrecy Act has never been adjusted. Senator Peter Riekitz, who supports the bill, stated, “After more than 50 years of Inflation, the reporting threshold of the Bank Secrecy Act is severely outdated. It must be modernized.” He added that the new bill “reduces the red tape for banks and credit unions,” ensuring that “law enforcement still has the tools necessary to do their jobs.”

Inflation is the core driving force behind this legislative amendment. In 1970, $10,000 adjusted for inflation would be equivalent to a purchasing power of over $75,000 in 2025. This means that the current reporting threshold has effectively shrunk by over 85%, leading financial institutions to submit millions of reports each year, the vast majority of which do not involve actual criminal suspicion, merely because the transaction amounts exceed an outdated threshold.

This outdated threshold not only imposes enormous compliance costs on financial institutions but also inundates law enforcement agencies with a massive volume of low-value reports, making it difficult to effectively identify genuinely suspicious transactions. The U.S. Congress recognizes that modernizing these thresholds can alleviate the industry's burden while enhancing law enforcement efficiency, making it a win-win reform direction.

Three Major Impacts of the New Threshold on Banks and the Cryptocurrency Industry

According to current laws, financial institutions must submit a CTR for cash transactions exceeding $10,000 and a SAR for transactions involving $2,000 to $5,000, depending on the level of suspicion or evidence of criminal activity. The new thresholds proposed by the STREAMLINE Act will bring about substantial changes.

Comparison of New and Old Thresholds:

Currency Trading Report (CTR): Increased from $10,000 to $30,000 (an increase of 200%)

Suspicious Activity Report (SAR) lower limit: Increased from $2,000 to $3,000 (an increase of 50%)

Suspicious Activity Report (SAR) Threshold: Increased from $5,000 to $10,000 (100% increase)

Inflation Adjustment Mechanism: The Ministry of Finance automatically adjusts the threshold every five years

For traditional banks and credit unions, the new threshold means a significant reduction in compliance costs. According to industry estimates, U.S. financial institutions submit over 20 million CTR reports each year, the vast majority of which relate to everyday business activities rather than criminal behavior. Raising the threshold to $30,000 is expected to reduce the number of reports by about 60% to 70%, saving the financial industry hundreds of millions of dollars in compliance costs each year.

U.S. virtual money exchanges must also comply with the Bank Secrecy Act. The impact of this new threshold is even more profound for the crypto industry. Crypto exchanges currently face a heavy compliance burden, as the frequency and amount of virtual money transactions often exceed those of traditional financial transactions. The $10,000 threshold means that a large number of daily transactions need to be reported, which not only increases operational costs but also affects user experience.

The new threshold will allow cryptocurrency exchanges to focus on genuinely suspicious transactions, rather than being forced to report a large number of normal transactions. This will enhance compliance efficiency, reduce operating costs, and leave more resources for innovation. More importantly, the introduction of an inflation adjustment mechanism ensures that the threshold will not become outdated again, providing long-term predictability for the industry.

U.S. Congress Promotes Improvement of Digital Asset Regulatory Framework

As legislators propose broader financial regulations, industry groups are strengthening their engagement with policies. On Tuesday, the fintech and crypto industry trade group alliance sent a letter to the U.S. Consumer Financial Protection Bureau (CFPB), urging it to finalize an open banking rule that affirms individuals (rather than banks) own their financial data.

Open banking allows consumers to share financial data with third-party applications via APIs, serving as a key link between traditional finance and fields such as decentralized finance (DeFi), cryptocurrency payment networks, and digital banking platforms. The establishment of this rule will remove barriers to the integration of the cryptocurrency industry with traditional finance, enabling users to more conveniently transfer funds and data between the two systems.

At the same time, Democratic senators in the U.S. Congress held talks with leaders of the virtual money industry regarding the U.S. Market Structure Bill. This bill corresponds to the Senate and House's CLARITY Act and aims to establish a unified federal framework for the regulation of digital assets. On October 22, Senator Kirsten Gillibrand and several other Democratic senators met with leaders from the cryptocurrency industry, including Circle, Ripple, and Chainlink.

According to an article by reporter Eleanor Tretter published on X, “The senators collectively expressed their commitment to completing a piece of legislation.” This bipartisan attitude of cooperation shows that the U.S. Congress is taking the legislative needs for digital asset regulation seriously, rather than just remaining in the discussion phase.

Uncertainty of Government Shutdown and Legislative Process

The U.S. government has been shut down since October 1, marking the third longest government shutdown in American history. It is unlikely that a vote on the digital asset market structure bill will take place before the government reopens. This political deadlock adds uncertainty to the advancement of the STREAMLINE Act and other crypto-related legislation.

However, the bipartisan support for the amendments to the Bank Secrecy Act is relatively high, as it does not involve ideological controversies and meets the dual goals of reducing regulatory burdens and increasing law enforcement efficiency. The Republican Party tends to favor reducing regulations, while the Democratic Party focuses on law enforcement efficiency, and this bill happens to address the core concerns of both parties.

Once the government reopens, the “STREAMLINE Act” could become one of the first pieces of legislation to be advanced. For the cryptocurrency industry, this is a positive signal indicating that the regulatory environment is evolving toward a more reasonable and predictable direction. The adjustment of thresholds for the first time in 50 years marks Congress's recognition that financial regulation needs to keep pace with the times rather than remain static.