Facebook Inc. faced its latest Washington crisis Monday, with Treasury Secretary Steven Mnuchin joining a parade of policy makers and politicians who\u2019ve bashed its proposed cryptocurrency, demonstrating the hurdles the company must overcome to ever make the token a reality.<\/p>\n
Speaking from the White House, Mnuchin said he has serious concerns about the national security implications of Facebook\u2019s coin and other virtual currencies. He said the potential for money laundering and other illicit activities is high, and vowed that Treasury would crack down on law breakers when it finds them.<\/p>\n
\u201cThis is indeed a national security issue,\u201d Mnuchin said in a briefing for reporters at the White House. \u201cWe will not allow digital asset service providers to operate in the shadows.\u201d<\/p>\n
Bitcoin pared an earlier decline after Mnuchin\u2019s comments, and was down 9.6 percent to $10,765.78 at 2:42 p.m. in New York.<\/p>\n
He is far from the first official to express skepticism. President Donald Trump took to Twitter July 11 to criticize Facebook\u2019s effort, saying he\u2019s not a fan of Bitcoin and that cryptocurrencies are often used to facilitate \u201cunlawful behavior.\u201d And some of Trump\u2019s staunchest foes in Congress, including Representative Maxine Waters, have also faulted Facebook, going so far as to demand that the company halt all work on the coin, called Libra.<\/p>\n
Federal Reserve Chairman Jerome Powell chimed in last week, telling lawmakers that he has \u201cserious concerns\u2019\u2019 about the token and cast doubt on Facebook\u2019s timeline for launching it by next year.<\/p>\n
The opposition from both Republicans and Democrats might put fresh pressure on Facebook — already under fire in Washington over scandals tied to data privacy — to assess whether its cryptocurrency is worth it. The fireworks will start again tomorrow when the company faces a hearing before the Senate Banking Committee followed by another Wednesday before the House Financial Services Committee.<\/p>\n
In prepared remarks before the Senate panel, the top Facebook executive working on Libra, David Marcus, went further than the company has previously to try to assuage policy makers\u2019 concerns that the coin could be a threat to the financial system.<\/p>\n
Marcus said the token won\u2019t launch until regulatory questions are fully addressed and he added that Facebook will get \u201cappropriate approvals.\u201d He said the coin isn\u2019t isn\u2019t intended to compete with countries\u2019 sovereign currencies and won\u2019t interfere with central banks on monetary policy.<\/p>\n
\u201cThe time between now and launch is designed to be an open process and subject to regulatory oversight and review,\u201d Marcus wrote. \u201cWe 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.\u201d<\/p>\n
In his remarks, Mnuchin said that Treasury\u2019s Financial Crimes Enforcement Network \u201cwill hold any entity that transacts in Bitcoin, Libra or any other cryptocurrency to its highest standards.\u201d He broadly criticized cryptocurrencies, echoing Trump, who said in his series of tweets last week that they are \u201cnot money.\u201d<\/p>\n
\u201cBitcoin is highly volatile and based on thin air,\u201d Mnuchin said. \u201cWe are concerned about the speculative nature of Bitcoin and will make sure that the U.S. financial system is protected from fraud.\u201d<\/p>\n
Mnuchin said he would address the issue with the finance ministers from other major global economies at a Group of Seven summit in France this week. He\u2019s also discussed the issue \u201cextensively\u201d with the Fed\u2019s Powell, he said.<\/p>\n
The sentiment poses risk for the broader digital coin industry. In the run-up to this week\u2019s hearings, a number of competing digital coin companies are distancing themselves from Facebook. Some industry groups are also conducting briefings for congressional staff, pointing out that Facebook\u2019s plan is light on details and not necessarily representative of all tokens.<\/p>\n
For Facebook, Mnuchin indicated that U.S. approvals may take a while.<\/p>\n
\u201cThey and others have a lot of work to do before they get us comfortable,\u201d he said. But he said the company is \u201cbeing very candid with the administration and where they are.\u201d<\/p>\n
Trump said four days ago that companies issuing cryptocurrency, including Facebook, should be subject to banking regulations.<\/p>\n
….Similarly, Facebook Libra\u2019s \u201cvirtual currency\u201d will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…<\/p>\n
\u2014 Donald J. Trump (@realDonaldTrump) July 12, 2019<\/p><\/blockquote>\n
Mnuchin said the president has \u201clegitimate concerns.\u201d He advised investors to \u201cbe careful\u201d before purchasing Bitcoin or other cryptocurrencies. \u201cThere\u2019s a lot of good things to invest in,\u201d he said.<\/p>\n
\u201cI have no idea why Bitcoin trades where it is,\u201d Mnuchin said. \u201cI\u2019m not commenting whether it\u2019s high or it\u2019s low.\u201d<\/p>\n
Now read: Bitcoin tumbles<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"
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