The US government views cryptocurrencies, including Facebook-backed Libra, as a national security issue. In a press conference today, Treasury Secretary Steven Mnuchin said the Treasury Department has "very serious concerns" that Libra could be misused by money launderers, terrorist financiers and other bad players. While the concerns are not entirely surprising, they do make the US government's stance on cryptocurrency more than clear.
According to Mnuchin, the US has been at the forefront of regulating entities that provide cryptocurrencies. It has also seen cryptocurrencies exploited to support illicit activities including cyber crime, tax evasion, extortion, ransomware, human trafficking and more. Still, Mnuchin said the US "welcomes responsible innovation, including new technologies that may improve the efficiency of the financial system and expand access to financial services."
"With respect to Facebook's Libra and other developments in cryptocurrencies, our overriding goal is to maintain the integrity of our financial system and protect it from abuse," Mnuchin said. He noted that Facebook (and any other cryptocurrency providers) will have to meet the same safeguards as traditional financial institutions, including those put in place by the Anti-Money Laundering Council, Financial Crimes Enforcement Network and Bank Secrecy Act.
That should come as no surprise to Facebook. While it's likely prepared to meet those standards, it will have to navigate pushback like this from the Treasury Department and the President himself, who claims cryptocurrencies are "highly volatile and based on thin air." Some lawmakers have called for Facebook to halt Libra's development, and others want to block all big tech companies from providing cryptocurrencies. Facebook is scheduled to testify at a Senate hearing tomorrow, and it has said it won't launch Libra until all of the regulatory issues are addressed.