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.
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.”
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.”