U.S. Treasury Secretary Steven Mnuchin believes cryptocurrency
transactions may pose certain risks to the financial system as they could
potentially be used fund illicit activities such as money laundering and drug
trafficking. Mnuchin’s recent comments also seemed to imply that Bitcoin might not be a
major financial asset class in the coming years.
During an appearance on CNBC’s Squawk Box, Mnuchin remarked:
“I can assure you I will personally not be loaded up on bitcoin in 10 years. I would bet even in five to six years I won’t even be talking about bitcoin as Treasury Secretary.”
Cryptos Must Be Tightly Regulated
In order to prevent financial crimes, the Treasury Secretary has asked
the Financial Action Task Force (FATF) and the Financial Crimes Enforcement
Network (FinCEN) to carefully monitor the use of cryptocurrencies. Both
agencies have also been instructed to prepare guidelines that may help regulate
crypto transactions.
Commenting on how American authorities will work together to draft rules and policies for individuals and businesses dealing in digital assets, Mnuchin said:
“We’re going to make sure we have a unified approach and my guess is that there are going to be more regulations that come out from all these agencies.”
Fiat Money Not Used to Launder Money?
Notably, Mnuchin recently argued that fiat
money (cash specifically) has never been used to finance illicit activities. He
also claimed that billions of dollars were being laundered through transactions
involving Bitcoin and other cryptocurrencies.
Meanwhile, Tom Robinson, chief scientist and co-founder at Elliptic, a
blockchain intelligence firm, published an opinion piece on VentureBeat in which he
noted that less than 0.5 percent of Bitcoin transactions are used to finance
unlawful activities.
According to an analysis performed by Robinson’s company, $829 million
in Bitcoin has been spent on illegal purchases via the dark web. In comparison,
more than $2.2 trillion of illicit fiat currency transactions are conducted
each year.
Bitcoin May Become An “Equivalent of Swiss-Numbered Bank Accounts.”
Despite many other reports which clearly
show that financial crimes involving fiat currencies pose a greater threat than
illegal crypto transactions, Mnunchin claims Bitcoin could potentially become
an “equivalent of Swiss-numbered bank accounts.”
He further noted that to a great extent, cryptocurrencies have been
dominated by speculation.
The Secretary also expressed confidence in the US dollar, stating:
“I think the dollar is the reserve currency in the world. It’s in our interest. We want to maintain it.”
Interestingly, Digital Currency Group CEO Barry Silbert said Mnuncin’s comments are actually a “complete and total validation of Bitcoin.”
