The American finance minister, Steven Mnuchin, touched Bitcoin and Facebook’s Libra cryptocurrency at a press conference on Monday and expressed concern about the abuse of cryptos for money laundering and terrorist financing.
Bitcoin, Libra Representing a matter of national security, says Mnuchin
The cryptocurrency market became bearish as Mnuchin mentioned the negative aspects of digital assets. His speech focused on Bitcoin and the Facebook Libra. Specifically, during a press conference on Monday, the secretary said Libra could be abused for criminal activities such as money laundering and terrorist financing.
Cryptocurrencies such as bitcoin have been exploited to support billions of dollars in illegal activities such as cyber crime, tax evasion, extortion, ransomware, illegal drugs and human trafficking. Many players have tried to use cryptocurrencies to fund their malicious behavior
He even said that cryptocurrencies were a national security issue and that he was uncomfortable with the launch of Libra today.
Mnuchin’s comments come a few days after President Donald Trump himself revealed in a tweet that he was not a fan of cryptocurrencies such as Bitcoin. His reaction accelerated the market correction, with Bitcoin losing around 10% over the weekend. Mnuchin defended his boss and said that Trump had legitimate concerns.
US government is planning strict regulations for Libra
The Minister of Finance is concerned that Libra would feed illegal activities. The social media giant announced the Libra project last month, triggering strong reactions from politicians and regulators around the world.
Facebook organized a hearing for the US Senate Committee on Tuesday before July 15. The next day the social media company is confronted with another hearing before the Domestic Financial Services Committee. Although it is difficult to predict the outcome of the Libra, we are seeing pressure from both Republicans and Democrats.
Last week, Jerome Powell, president of the Federal Reserve, told the legislator that he wanted Facebook to stop the launch of Libra, which is planned for next year.
Facebook commented on the situation, to tell CNBC that it expected a critical response from regulators, central banks and legislators around the world. Nevertheless, Libra was announced a year later for this exact reason – to alleviate those concerns.
At this point, Mnuchin considers Libra to be a matter of national security. He said:
Regarding Facebook Libra and other developments in cryptocurrencies, our most important goal is to maintain the integrity of our financial system and protect it from misuse. We do not allow suppliers of digital asset services to work in the shade.
All in all, the predominant words that Mnuchin used in his speech were negative, with terms such as illegal, terrorist financing, money laundering, highly volatile, speculative nature, and fraud often used repeatedly.