US Treasury Secretary follows up on POTUS’ Libra criticism; Bitcoin under fire

Libra’s hopes seem to be hanging by a thread.

Facebook has add yet another foe to its cryptocurrency project,  the United States Treasury Secretary, Steve Mnuchin. Picking up where the President of the United States left off last week, his appointee lashed out at the cryptocurrency market in a recent press briefing.

While only over a month has passed since Libra was unveiled, its list of opponents has continues to grow. From congressional lawmakers vying to ban the cryptocurrency days after its launch, to the Commander-in-Chief urging Facebook to ‘seek out a Banking Charter,’ the upper echelons of the US administration are visibly rattled by the social media giant’s payment project.

Speaking from the James. S. Brady Press Briefing Room, Mnuchin spoke about the wider implications of Facebook’s cryptocurrency, far beyond the domestic borders of the United States. Even internally, digital assets can be potentially employed in nefarious ways like money laundering and financing terrorism, he said.

“The Treasury Department has expressed very serious concerns that Libra could be misused by money launderers and terrorist financiers.”

Veering towards Bitcoin and the larger cryptocurrency market, Mnuchin dragged back the long-forgotten claim of Bitcoin being the currency of the ‘dark web.’ He highlighted the use of the king coin in criminal activities like cyber-crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.

Likening the two, Libra as a global-private payments project and Bitcoin with its dark history, the Treasury Secretary called this dichotomy a “national security issue.” He stated,

“The United States has been at the forefront of regulating entities that provide cryptocurrencies. We will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities.”

Mnuchin added that Bitcoin and other cryptocurrencies will be scrutinized by the “highest standards” of the Treasury’s Financial Crimes Enforcement Network [FinCen]. The Treasury Secretary criticized the top cryptocurrency as being “highly volatile” and “based on thin air.” In closing he said,

“We are concerned about the speculative nature of Bitcoin and will make sure that the U.S. financial system is protected from fraud.”

Bitcoin, Libra, the cryptocurrency market, and the larger implications it has on the global economy will be discussed by several finance ministers and central bank governors during the G7 meeting in France, according to Mnuchin.

Echoing the words of the President and the Federal Reserve Chair, Bitcoin and Libra have been at the center of a lawmakers’ firing squad over the past few weeks.

Jerome Powell, Chair of the Federal Reserve, during a congressional hearing before the House Financial Services Committee had stated that Libra ‘cannot go forward’ until serious concerns regarding ‘money laundering, privacy, and financial instability,’ are addressed, something reiterated by Mnuchin on July 15.

Trump, making his crypto-twitter debut following Powell’s comments, called out Libra and equated Bitcoin to “illegal drug” trades, reaffirming his belief for the “one true currency,” the US dollar.

In response, Facebook and its team are playing the waiting game. David Marcus, spearhead of the Libra project and VP of Messaging Products at Facebook, stated that the cryptocurrency and its wallet Calibra will not see the light of day, until and unless all the “appropriate approvals” are secured by Facebook.

Competition with a domestic fiat currency, or manipulating a country’s internal monetary policy is not the intention of the Libra project, said Marcus. He said,

“We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”

Representatives from Facebook will address the Senate Banking Committee this week, followed by round two with the House Financial Services Committee next week.

Libra’s regulatory ‘Tussle in Washington D.C.’ is just getting started.