Bitcoin, Facebook Libra and other cryptocurrencies pose national security threat; U.S. Treasury Secretary says
The news over the past few weeks has been terrible for Facebook Libra, Bitcoin and other crytocurrencies. It all started when both chambers of US Congress asked Facebook to answer questions about its new cryptocurrency, Libra.
On Thursday, President Trump tweeted saying: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….” As if things could not get worse for cyrptocurrencies, the US announced it is proposing a bill that would ban Facebook Libra and other big tech companies from offering financial services and digital currencies.
Now, U.S. Treasury Secretary Steven Mnuchin said that he had “very serious concerns” about cryptocurrencies, including the one being developed by Facebook. “This is indeed a national security issue,” Mnuchin told reporters at a press conference yesterday. “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”
Mnuchin made it clear that whether it’s Bitcoin or Facebook, those using distributed ledger technology must implement the same anti-money laundering laws and comply with the Banking Secrecy Act and FinCEN, just as banks do. However, it’s unclear how the Treasury Secretary expects a decentralized entity, such as Bitcoin, to comply with these regulations. To enforce those goals, the U.S. will go to “great lengths” to ensure that both domestically and internationally that cryptocurrency is regulated.
“Regulation does not stop at the U.S. border. FATF, known as the ‘global standard setter’ for AML/CFT [anti-money laundering and Countering Financing of Terrorism Act of 2009], adopted comprehensive measures on how countries must regulate and supervise activities and providers in the space. This is a major step towards harmonizing international regulations concerning cryptocurrencies.”
Since last week, Bitcoin lost at least 15% of its value. The world’s most popular cryptocurrency experienced its high volatility and tumbles to under $10,000 from its over $14,000 peak. As for Facebook, the social giant is not backing down. The company has responded to all skepticism about its Libra project from governments around the world. Facebook said it plans to work with “regulators, central banks, and lawmakers” to address and, hopefully, overcome their concerns.