US Treasury Secretary Steven Mnuchin gives a press conference on Bitcoin and other digital currencies. He announces that the US government will not tolerate Bitcoin being used for illegal activity or attacking the dollar’s position as a reserve currency. On the sidelines of a meeting of the G7 finance ministers in Paris, Olaf Scholz and a German minister on cryptocurrencies also made their first appearance.
Facebook’s announcement of creating its own cryptocurrency with Libra reveals a great deal of absurdity in the worldview of journalists and politicians. Libra is not even developed yet, and every success of the future cryptocurrency is still on the edge. In the understanding of the media and politics Libra seems to have catapulted however only by the announcement to the point of the crypto market.
US Treasury Secretary Steven Mnuchin is giving a press conference on “Digital Assets like Bitcoin and Libra”. If he – and journalists – call specific crypto currencies in the course of this conference, these are always Bitcoin and Libra. The Minister of Finance does not announce anything fundamentally new; Anyone who has followed the politics and regulation surrounding Bitcoin and the news from the G20 and the FATF will not find anything he does not already know. It is interesting, however, above all that cryptocurrencies are now being debated for the first time by a US finance minister.
Mnuchin first reads a statement. The Treasury Department is “seriously worried” about “the growing misuse of digital currencies for illegal transactions.” More specifically, “Bitcoin has been abused for billions of dollars of illegal activities, including cybercrime, ransomware, drug trafficking and human trafficking. We regard this as a topic of national security. “The regulator FinCEN has several procedures underway, “there will be several executions of the law, we are absolutely focused on this matter.” Mnuchin announces that the authorities will crack down on the illegal use of Bitcoin and other cryptocurrencies. “If you think you could use Bitcoin on the Dark Web and you would not get caught – you’ll be caught. It’s one thing to use for speculation, but another to do illegal things.”
Mnuchin emphasizes that “we will not tolerate digital asset servicing providers operating in twilight … They must take the same anti-money laundering and terrorist financing measures as traditional financial institutions. They must comply with the obligations of the Bank Secrecy Act (BSA) and register with FinCEN. “He emphasizes on several occasions that the same rules apply to companies working with digital currencies as to traditional banks. He always returns to this statement in his answers to questions from the press.
The Minister of Finance is concerned about the speculative nature of Bitcoin. He promises that regulation will not stop at the borders of the United States. He referred to the extensive rules that the FATF recently adopted in consensus with the G20. An investment in cryptocurrencies is in itself alright, even if he advises caution. “There are a lot of good things to invest in, of course. Our number one topic is: We do not want bad actors to use cryptocurrencies. The use is dominated by illegal activities and speculation. Investors should know that.”
He explains to Libra that there are major concerns that the currency will be misused for money laundering and there are already intense discussions with Facebook. While Libra tends to occupy a subordinate position in Mnuchin’s lecture, it seems to dominate journalists’ interest. There are many questions about this. Mnuchin says, above all, that it will be “alright” if Facebook does it right, even if he later vehemently denies being “comfortable” with it. To get it right, Facebook still has a lot of work to do.