US Treasury Secretary Says Firms Left Libra Due to Compliance Issues

United States Treasury Secretary Steven Mnuchin has attributed the recent spate of firms abandoning Facebook’s Libra stablecoin project to regulatory concerns.

On CNBC’s Squawk Box on Oct. 14, Mnuchin stated that companies are abandoning the Libra project because it is “not up to par” with American Anti-Money Laundering standards, saying:

“If they don’t meet the standards of our money-laundering standards and the standards that we have at FinCEN, we would take enforcement actions against them. I think they realized that they are not ready, they are not up to par and I assume some of the partners got concerned and dropped out until they meet those standards.”

A demarche to the Libra Association

Mnuchin’s statement comes a few days after Visa, eBay, Stripe and Mastercard all announced that they are dropping out of the Libra Association, the stablecoin’s governing body, saying that they had chosen to redirect their focus for the time being.

Prior to that, major payment processor PayPal announced its withdrawal from Libra, as regulators continue to scrutinize the project.

A spokesperson for the firm told Cointelegraph that it officially left the association, adding:

“We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”

At the same time, Coinbase CEO Brian Armstrong criticized U.S. senators for asking Stripe, Mastercard and Visa to leave Libra. “Something feels very un-American about this. Two senators writing to Visa, Mastercard, and Stripe to ask them to withdraw from Libra”, Armstrong wrote.

Announced this summer, Libra would ostensibly serve as a payment instrument for the user base of Facebook and its associated services like Instagram. Since its announcement, it has been the subject of scrutiny from regulators and lawmakers, who are concerned about its possible effect on global trade, finance and monetary sovereignty.

US State of Ohio Suspends Service for Paying Taxes With Bitcoin

Ohio Treasurer Robert Sprague announced the immediate suspension of the OhioCrypto.com website that allows businesses to pay taxes with Bitcoin.

In an Oct. 2 press release, Sprague announced that according to an internal review, approval by the Board of Deposit was required before Ohio launched the website that allowed businesses to pay taxes with digital currencies.

Furthermore, the State Board of Deposit has asked Attorney General Dave Yost to further research the legalities of how the crypto portal was set up and whether BitPay – the third-party processor that powered the service – constituted a “financial transaction device.”

If so, the firm should have been selected under a competitive selection process codified in state law. Sprague said:

“It is vital that Ohio explores innovative, new technologies and processes that continue to drive Ohio into the future. However, we must make sure any new processes that are implemented, such as OhioCrypto.com, are established in accordance with Ohio law.”

The website has since been taken down and redirects users to the Treasurer’s main site. Sprague stated:

“As Ohio Treasurer, it’s my job to provide trusted stewardship and protection of Ohio’s tax dollars, and to follow the laws of this state. Until a formal opinion is issued by the Attorney General, I feel it is prudent to suspend the website.”

Paying taxes with crypto not very popular

Sprague explained that in the 10 months since the website was launched, less than 10 businesses have paid their taxes using Bitcoin.

The program was launched in November 2018 under the purview of the previous Ohio Treasurer, Josh Mandel, who told reporters at the time that the program was “planting a flag” for the state in terms of national cryptocurrency adoption, adding that he does see Bitcoin as a legitimate form of currency.

Ohio blockchain state?

Cointelegraph previously reported that the County Auditors’ Association of Ohio announced the formation of a working group to explore the benefits of blockchain in terms of real estate transactions and the transference of land titles across multiple counties. Ohio further planned to invest more than $300 million in blockchain startups through 2021, namely to startups developing blockchain applications for local businesses, government, welfare projects and others.

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