US Treasury Secretary Mnuchin is not comfortable with Facebook's Balance



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US Treasury Secretary Steven Mnuchin agrees with his boss that cryptography is for crooks.

At a press conference on Monday, Mnuchin expressed the Trump Administration's concerns about Facebook's Scale and crypto-currencies such as Bitcoin. Mnuchin's statements come at the two hearings this week at Capitol Hill, where Facebook channel chief David Marcus is expected to testify before the legislators of the Senate and the House.

The press conference also follows a series of tweets from President Donald J. Trump last week regarding cryptocurrencies and Libra. At the time, Trump said crypto-currencies were used in "illegal" activities such as drug trafficking. In a subsequent tweet, Trump said that Facebook may need to acquire a bank charter to deal with Libra.

Although Mr. Mnuchin did not make any further statements of principle on Monday, he reiterated statements made by various government entities in the past, describing the potential for criminals to use cryptocurrency.

"Libra could be misused by money launderers and financiers of terrorism," Mnuchin said. He added:

"It's indeed a national security problem."

The Financial Crime Network (FinCEN) will examine Libra and bitcoins, and will maintain any entity that trades with "the highest standards," said Mnuchin.

Mr Mnuchin also referred to the Financial Action Task Force (FATF), which last month issued guidance to central banks on how to regulate cryptocurrency service providers. In particular, the FATF guidelines recommend enforcing the "travel rule", which requires stock market operators and portfolio providers to maintain customer knowledge information about the recipients of the transactions.

"We are doing everything in our power to ensure that effective regulation is not limited to our borders," said Mnuchin.

Watch the Libra

Mnuchin referred to Libra, which Facebook had announced for the first time last month, several times at the half-hour press conference. Representatives of the social media giant have met with Treasury officials, as well as other government agencies, he said.

As long as Facebook can meet strict anti-money laundering standards, launching Libra should not be a problem, but Mnuchin has repeatedly said that society still has a long way to go before convincing itself its conformity.

Mnuchin said that he was "not comfortable" with the launch of Libra yet.

"With regard to Facebook's Balance, our main goal is to maintain the integrity of our financial system and protect it from abuse," said Mnuchin.

In response to a question about bitcoin and more generally about cryptocurrencies, Mnuchin said he did not know and would not speculate on how the price of bitcoin could trade at its current level.

"We will ensure that the general public and investors understand what they are investing in and whether it is the SEC or other regulators [will be] appropriate information. "

Bitcoin's price has risen more than 4% in 45 minutes since the start of the conference

Steven Mnuchin's picture via YouTube

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