The profit motivated don’t wait for permission to innovate. It’s essential to remember this with the Bank Secrecy Act top of mind.
The legislation was passed in 1970 to help the federal government deter money laundering and other financial crimes. Among other things, banks are required under the law to generate “currency transaction reports” for cash transactions north of $10,000, along with “suspicious activity reports” for $2,000 to $5,000 depending on the circumstances.
In contemplating the rules, it’s not enough to point out that $10,000 in 1970 meant a great deal more literally and figuratively than $10,000 in 2025. Which means that we can cheer the Streamlining Transaction Reporting and Ensuring Anti-Money Laundering Improvements for a New Era Act. The legislation, introduced by Sens. Tim Scott (R-SC) and John Kennedy (R-LA), aims to bring a 55-year-old law into the 21st century with amended requirements for currency transaction reports that push the cash numbers up from $10,000 to $30,000, $2,000 to $3,000, and $5,000 to $10,000.
It will be said once again that the legislation represents progress, but it will also be said once again that the Bank Secrecy Act is 55 years old. Stop and think about that, and in thinking about it, please contemplate how much the movement of money has been modernized since 1970s. It’s not just that money in amounts of $10,000 and/or $30,000 has long moved with rising frequency at the click of a mouse. Internet-infused banking is surely amazing, but to reduce money movements to computer imagery is to reveal oneself as somewhat stuck in the past.
To see why, consider how money can be moved in 2025. In particular, consider money transfers via cryptocurrencies of the stablecoin variety.
Not only have crypto brokerages rapidly worked around legislated barriers to them paying interest on stablecoin deposits (all it took to get around the law was the transformation of interest paid on deposits into “rewards” paid on deposits) such that they can conduct banking functions without the stringencies that banks endure, it’s crucial to contemplate the virtual movement of stablecoins. In thinking about it, it’s easy to see the calcified nature not just of the Bank Secrecy Act, but its modern replacement.
While the efforts of Sens. Scott and Kennedy to bring reason and reality to a very old law yet again rate cheering, it’s essential to think about their legislation while fully cognizant of the 2025 truth that stablecoins can be sent anytime and anywhere without any of the rules that banks toil under. Translated, cash in much greater amounts can be moved within the crypto universe with great speed, and at low cost.
It’s just a comment that right as banks are “allowed” relaxed rules on cash transfers, transfers of digital money matched one-for-one with dollars renders the legislated ease arguably more stringent than the Bank Secrecy Act itself. All of which requires a rethink of the limits placed on banks. They clearly want to compete, but legislative limits increasingly render the competitive efforts of banks the stuff of playing basketball, football or golf with one hand tied behind one’s back.
All of which calls for a rethink of the limits placed on banks in general. As the proliferation of cryptocurrencies plainly indicates, the profit motive is rapidly erasing the worth and effectiveness of legislation foisted on banks. Worse, the legislation is limiting the ability of banks to meet the needs of their customers. Which is what political and regulatory barriers to achievement generally do.
Source: https://www.forbes.com/sites/johntamny/2025/10/29/us-banks-are-required-to-compete-with-one-arm-tied-behind-the-back/
