Donald Trump’s tweet about cryptocurrencies has undoubtedly sparked hubbub about this budding class, especially the legality of it all and how it fits into the world of traditional finance. Unsurprisingly, those close to the American president have followed his lead, sparking discourse about Bitcoin and its altcoin brethren.
One such commentator was Steven Mnuchin, the U.S. Treasury Secretary. Speaking to CNBC, the politician reaffirmed the idea that Bitcoin is somewhat of a criminal’s tool.
“Very Strong” Crypto Regulations On Their Way
Cryptocurrencies may soon be subject to “very, very strong” regulations — according to Treasury Secretary Mnuchin anyway. Elaborating to the CNBC “Squawk Box” panel on Thursday, he stated that digital assets like Bitcoin — especially Bitcoin — cannot become the 21st century’s version of a “Swiss-numbered bank account”, which he claims were and maybe still are a risk to financial stability.
This comes shortly after he implicated Bitcoin and other cryptocurrencies in a list of criminal activities, including but not limited to “tax evasion, extortion, ransomware, [the sale of] illicit drugs, and human trafficking.”
While Mnuchin didn’t expand on what exact regulatory measures he is thinking of floating, he did state in a press conference this week that companies involved in cryptocurrency should act almost like “traditional financial institutions”. He opined:
“The United States Treasury has been very clear to Facebook, to Bitcoin users, and to other providers of digital financial services that they must implement the same [rules] as traditional financial institutions. The rules governing money-service providers apply to physical and electronic transactions alike.”
Should crypto exchanges and other industry service providers be regulated like banks, they will be mandated to actively prevent money laundering and terrorist financing.
Others have been even more impassioned. In a separate segment, this time on Bloomberg, Californian Representative Brad Sherman doubled-down on the idea that cryptocurrencies should be banned in their entirety. Sherman notably likened Libra, which he hilariously called “Zuck Bucks” during a Congressional hearing, to 9/11, claiming that these two things are on the same playing field in terms of being destructive innovations.
Sherman, like Mnuchin and Trump, are fearful that all digital assets, including Libra, are and will be used for criminal activities or as ways to subvert the U.S.
Bitcoin Believer Pushes Back
While the idea that cryptocurrencies are used for mostly illicit purposes is one held by some of the most important names in politics and finance, CNBC’s resident Bitcoin bull, Joe Kernen, was quick to push back against Mnuchin’s statements.
Kernen, who “came out” as a cryptocurrency believer just last month, notes that should currencies be banned because of their affiliation with criminal activity, the United States Dollar would be a goner. The anchor notes that fiat cash, especially the $100 bill, is “laundered all the time, and used for nefarious activities”.
Even “digital fiat” is reported to be used to launder money, as made apparent by Bloomberg’s seminal report on “Dirty Money” earlier this year, which stated that banks process shady transactions to the tune of $2 trillion each year.
Of course, Mnuchin begged to differ, noting that cash isn’t always used to launder money, unlike Bitcoin. That’s a representative of the Treasury for you.
It is important to note that CNBC viewers weren’t only inundated with anti-Bitcoin stances and grandstanding. The day prior to Mnuchin’s assertion on television that cash isn’t as illicit as the leading cryptocurrency, Patrick McHenry of the House’s Financial Services Committee affirmed that he doesn’t want to stifle innovation.
The Representative added that even if the U.S. Government wanted to kill Bitcoin, it is effectively impossible, looking to China’s failed attempts to suffocate their cryptocurrency community as a perfect case in point.
The world is finally starting to take stances on Bitcoin. But which side will win?