A recent memo from the US Treasury Office of Inspector General indicated the US Bureau of Engraving and Printing (BEP) and the US Mint face continuing challenges with coin and currency production along with the advance of cryptocurrencies and alternative forms of payment. For the Mint, the costs of producing penny and nickel coins are now double their face value because of rising metal prices. The Mint continues reviewing “the production and use of coins, the use of alternative metals, and the suitability of Mint facilities for production,” said the IG.
The agency also must have strong internal controls in place to protect US coinage. “This is done by preventing the acceptance of illegitimate coinage under its redemption program… as well as maintaining proper physical security at all Mint facilities,” according to the report.
For BEP, it is critical that effective project management practices are applied to stymie counterfeiters and to identify and implement counterfeit deterrence features in a timely manner to safeguard US currency from “this significant threat.”
On the cryptocurrency front, the IG noted the Mint and BEP must consider “the effect of alternative payment methods and other technological advances (such as stored value cards, the Internet, smartphones, and virtual currencies) as well as consumer demand on their respective business models, practices, future planning and interactions with their customers, and the Federal Reserve Bank.”
It also pointed out that Congress and federal regulators continue to evaluate the legality, legitimacy, and regulatory framework for virtual currencies such as Bitcoin. Cybersecurity and anti-money laundering are other challenges.
The report also noted that the Financial Crimes Enforcement Network (FinCEN) has some related concerns, too, notably the increasing use of mobile banking, Internet banking, Internet gaming, and peer-to-peer transactions; as well as money service businesses, including virtual currency administrators and exchanges.