Steven Mnuchin, U.S. Secretary of the Treasury, testified before the Senate Finance Committee on Wednesday regarding President Donald Trump’s budget for the fiscal year 2021 released earlier this week.
During the hearing, Senator Todd Young asked Mnuchin several questions about cryptocurrency and the challenges it creates for the U.S. government in various ways.
U.S. Treasury Secretary Steven Mnuchin gave his testimony on cryptocurrency before the Senate Finance Committee on Wednesday. Mnuchin said crypto is a “crucial area” that the Treasury has spent a lot of time on.
He also talked about stablecoins and announced that new crypto regulations focusing on transparency will be rolled out soon.
Mnuchin on Cryptocurrency
“Proponents of crypto believe it can benefit the everyday consumer by lowering transaction costs for online purchases and increasing protection from identity theft and breaking down various financial barriers”, Young began. “How does your department, Mr. Secretary, plan to respond to this rapidly evolving technology of cryptocurrency and other digital assets?”
Treasury Secretary Steven Mnuchin testified before the Senate Finance Committee on Wednesday.
Emphasizing that the Treasury is supportive of the proposals, including those concerning cryptocurrency, outlined in Trump’s new budget, Mnuchin replied:
We’re spending a lot of time on the issue of cryptocurrencies and digital payment systems. It’s a crucial area.
While asking Mnuchin questions on cryptocurrencies, Young referenced Trump’s budget proposals for added crypto oversight and the IRS’ efforts, including increased crypto-related enforcement and additional guidance for cryptocurrency. Earlier this week, the White House released the government’s budget for the fiscal year 2021 containing two proposals affecting the crypto industry. One was to return the Secret Service to the Department of Treasury and the other was a request for more funding for the Financial Crimes Enforcement Network (FinCEN) to enhance its work on regulating the crypto sector.
Mnuchin on Cryptos, Bitcoin, Stablecoins, New Crypto Regulations Coming Soon
The Treasury secretary noted that “there’s a lot of different things that get grouped together into this one area cryptocurrency.” He proceeded to address three key areas: pure cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). Young pointed out that there’s a concern that cryptocurrencies can be used to operate outside of the current international financial system.
Senator Todd Young
On the subject of stablecoins, Mnuchin said: “we do think the technology can be used to reduce payment processing quite considerably, particularly for small dollar payments cross-border.” Regarding a central bank digital currency, the Treasury secretary said both Fed Chairman Jerome Powell and him agree that the U.S. does not need to consider issuing a digital dollar right now “but could consider again down the road.” He added:
On pure cryptocurrencies like bitcoin, and there are others, we want to make sure that these are not used as the equivalent of secret bank accounts.
The Treasury secretary further revealed: “We are working with FinCEN and we will be rolling out new regulations to be very clear on greater transparency so that law enforcement can see where the money is going and that this isn’t used for money laundering.”
Mnuchin’s testimony followed one by Powell who gave his testimony before the House of Representatives’ Financial Services Committee regarding the country’s monetary system and the state of the economy on Tuesday. The Fed chairman answered a number of questions regarding cryptocurrencies, including the digital dollar’s progress. He was urged to speed up the work on it since China claims that it will be rolling out a digital yuan soon. Powell also admitted that Facebook’s Libra project was a wake-up call for the Fed.