The same rules that apply to transactions “flowing through SWIFT or flowing though our financial institutions ought to apply to those transactions as well”, Pompeo explained. “I concede it will be difficult to do.”
U.S. Secretary of State Michael Pompeo has said he believes that cryptocurrencies should be regulated in the same way as financial institutions.
In an interview with CNBC’s Squawk Box on Tuesday, Pompeo was asked how best to regulate Facebook’s Libra or bitcoin.
“My sense is this: We should use the same framework that we use to regulate all other electronic financial transactions today. That’s essentially what these are. These are monies moving through markets, or in some case disintermediated transactions.”
During the discussion that covered a range of issues from the Hong Kong protests to state-run propaganda farms using Twitter and Facebook, the Trump adviser also addressed the use of pseudonymous cryptocurrencies in the funding of terrorism and money laundering.
He argued that if such private transactions became the norm, it would “decrease the security for the world if that’s the direction we travel.”
Being able to track the flows of money around the world “has helped keep the entire world secure and to fight terrorism and other nefarious activity … We need to preserve a financial system, a global financial system, that protects that”, Pompeo said.
However, he also appeared to agree with the interviewers who joked that all money laundering until now has been conducted with fiat currency.
US Senate Floats ‘Digital Dollar’ Bill After House Scrubs Term From Coronavirus Relief Plan
The bill, introduced by Ranking Member Sen. Sherrod Brown (D-Ohio), is not proposing a crypto dollar but a digitized version of the existing dollar, a process advocates including former Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo have called for to maintain U.S. financial hegemony.
According to the draft, the digital dollar will be “dollar balances consisting of digital ledger entries recorded as liabilities in the accounts of any Federal Reserve bank.”
The bill even notes that such wallets should be branded as “FedAccounts.”
Federal Reserve member banks could create a “pass-through digital dollar wallet”, which would hold a person’s share of a pooled reserve balance that the member bank maintains at any Fed bank.
“Each member bank shall establish and maintain a separate legal entity for the exclusive purpose of holding all assets and maintaining all liabilities associated with pass-through digital wallets”, the bill states.
States might also designate some non-member banks to offer these wallets.
The House draft bills mentioned a digital dollar as one potential method for distributing relief funds to U.S. residents during the ongoing coronavirus outbreak. Unemployment numbers have spiked as social distancing and “shelter-in-place” orders have cut sharply into retail revenues.
However, the Senate version appears to exist independently of any such relief.