Treasury Secretary Mnuchin: We are concerned by Bitcoin’s speculative nature
Bitcoin is concerning, and Libra has a long way to go before it's ready for release, Mnuchin says.
In a briefing on cryptocurrency regulation, US Treasury Secretary Steven Mnuchin highlighted the work being done by a range of regulators in the United States and around the world. He also clarified the administration's stance on cryptocurrencies including Libra.
The following are the key points according to Mnuchin:
- Cryptocurrency service providers of all kinds will operate on the same regulatory level as their equivalent non-crypto institutions. For example, they will need to have the same know your customer (AML/KYC) compliance for crypto money transmitters and suitable investor protection for Bitcoin speculators.
- The rest of the G20 is on board with these developments.
- Libra and other cryptocurrencies are not being banned, and there is no specific anti-crypto bent in play, except to the extent that there are concerns digital assets can be used to facilitate crimes, undermine the dollar or pose other risks where non-crypto finance does not. Mnuchin repeatedly emphasised that the intention is to provide a level playing field, rather than to be pro or anti crypto.
- Steven Mnuchin broadly shares the president's "not a fan" sentiment of Bitcoin and other cryptocurrencies "whose value is highly volatile and based on thin air".
Although there is no specifically anti-crypto agenda in play, Mnuchin also made it clear that the treasury department has no intention of risking the US dollar's position as the global reserve currency.
"As the president has said, bitcoin is highly volatile and based on thin air. We are concerned about the speculative nature of Bitcoin, and will make sure the US treasury system is protected from fraud," he said. "Treasury takes very seriously the role of the US dollar as the world's reserve currency, and will continue our efforts to protect our country and secure the US and global financial systems."
What about Libra?
Libra's reveal was not the catalyst for any new regulations, Mnuchin said. Instead, its reveal spurred a lot of interest in the space, so it just seemed like a good time to reveal the regulatory work going on behind the cryptocurrency scenes in the last year.
Similarly, the fact that Facebook is behind Libra is not affecting the level of scrutiny the coin is being subjected to, in theory at least. It will be a level playing field for banks, existing financial services and both the biggest and smallest crypto ventures.
That said, Mnuchin stressed that he is very much "not comfortable" with Libra in its current incarnation, and that "they have a lot of work to do" before going anywhere.
"They're going to have to convince us they have very high standards before getting access to the US financial system," he said.
On crypto payments
"Whether you walk into a money service provider, a bank, or do it digitally, you're gonna have to adhere to the same rules."
Mnuchin's briefing affirms that the US is on the same page as other G20 nations and is committed to ensuring that virtual asset service providers with US customers are complying with Financial Action Task Force (FATF) cryptocurrency regulations.
On crypto speculation
"We'll make sure the general public and investors understand what they're investing in, and whether it's the SEC or other regulators, there's proper disclosures."
"I think they've been very candid with the administration about where they are. I'm not going to publicly speculate how long it will take them to get to the point where we're comfortable with it, but they are a long way away. Before they or anyone else does this, we're going to make sure the financial system is protected."
Disclosure: The author holds BNB and BTC at the time of writing.