US Sec. of State Pompeo Says Crypto Should Have Same Regulatory Framework As SWIFT

US Secretary of State Mike Pompeo has said that there is a need to create a regulatory framework for the crypto industry similar to the one used to regulate the SWIFT network. “The same set of requirements for things flowing through SWIFT, flowing through our financial institutions ought to apply to those financial transactions as well,” he said. The Secretary of State made the remarks during an August 20 interview on CNBC when he was asked how crypto should be regulated.

Creation of a Regulatory Framework

According to the Secretary of State, poor tracking of money flows and an inability to understand the flow of money through the financial system was partially to blame for terror acts, such as 9/11. Terrorists took advantage of this gap in understanding to fund their plots. Pompeo said the world would become less secure if anonymous transactions, which made it difficult to track information flow, were allowed to become the norm.

Pompeo said that he believed crypto coins were money moving through various markets. As a result, the same requirements that govern flows of money through SWIFT or financial institutions needed to apply to crypto transactions. He acknowledged the difficulty of applying the same set of rules but said the “regulatory theory” applicable for such institutions should remain the same.  

Pompeo is the third senior member of the Trump administration to discuss cryptocurrencies in as many months. On July 12, President Trump took to Twitter to express his view on crypto assets. The president said that these crypto-assets were used to facilitate illegal activity. He also said that the Facebook Libra project would also cause similar problems. Others in the current administration have also criticized crypto. Steven Mnuchin, the Treasury Secretary, expressed deep concern about the Libra project in July.