Facebook’s Libra coin has dominated cryptocurrency headlines since its announcement last month. Today was no exception. This afternoon Treasury Secretary Steven Mnuchin said it was a “national security issue” because it could be misused by money launderers and terrorist financiers.
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs and human trafficking,” he said and added that Facebook had a “lot of work to do” as far as the blockchain was concerned.
Secretary Mnuchin’s remarks are the latest in commentary from the US government. President Donald Trump tweeted comments critical of the coin on Friday and Fed Chief Jerome Powell said he had “serious concerns” about it during a Congressional testimony last Friday. David Marcus, head of Libra at Facebook, will testify before the Senate and Congress tomorrow and day after.
While they have garnered headlines and driven news cycles, the remarks made by Mnuchin and Powell need to be taken in proper context. Numerous commentators on Twitter have pointed out that Mnuchin’s remarks are not really indicative of a critical stance against cryptocurrencies unless they are used for criminal purposes.
Indeed, Mnuchin’s views on cryptocurrency usage were made clear in response to a question about specific illicit activities that could trigger the Feds.
“If you are dealing with a legitimate entity in the US, those entities are subject to AML and KYC…If you are looking to use Bitcoin to go through those entities and think you are not going to get caught, then you are going to get caught. So this is a warning,” he said.
Powell has also said that he can envision a time when the United States returns to a multicurrency regime, as was the case before the US government – backed dollar became predominant. Cryptocurrency markets are flush with numerous coins, all touting various benefits. While a majority of them are not expected to survive, some are expected to thrive in a financial ecosystem dominated by multiple coins.