The Trump Administration and the world’s regulators don’t seem to want to give the crypto industry any breathing room.
Speaking with CNBC’s “Squawk Box” panel on Tuesday, Mike Pompeo, the U.S. Secretary of State, doubled down on the narrative that digital asset transactions should be more heavily enforced.
Regulate Crypto Like SWIFT
With cryptocurrencies becoming more and more relevant on the global stage, CNBC’s resident Bitcoin bull, Joe Kernen, took a chance on Tuesday to bring up cryptocurrencies in an interview with Mike Pompeo.
Surprisingly, Pompeo played along, but nonetheless asserted that he didn’t want to create a “viral moment” or “meme” by taking a certain stance on this budding technology.
"Bitcoin Should Be Regulated As Other Electronic Financial Transactions"
Secretary of State Mike Pompeo https://t.co/pAWppx49KK
— Josh Olszewicz (@CarpeNoctom) August 21, 2019
Pompeo argued that the anonymous/pseudonymous transactions that cryptocurrencies can enable do pose a security threat or “risk” to America and its allies. To back his point, the Secretary of State cited the 9/11 attacks, which is something that Congressman Brad Sherman did to bash Libra last month:
“We know this from 9/11 and terror activity that took place in the 15 years preceding that where we didn’t have good tracking, we didn’t have the capacity to understand money flows and who was moving money.”
To mitigate a redux of 9/11 enabled through financial technologies, Pompeo proposed that “electronic financial transactions” should be regulated by the same laws that a global platform like SWIFT is subject to.
While he admitted that it would be difficult to do so, he accentuated that the world is much less secure without proper regulation over a cashless world. In fact, Pompeo argued that regulatory oversight over fiat finance has “helped keep the entire world secure and to fight terrorism and other nefarious activity.”
In his statement, the Trump advisor staved off from mentioning certain fintech platforms or even cryptocurrencies, but the comment was made in direct response to an inquiry from Kernen.
Pompeo’s statements on the cryptocurrency industry come shortly after other prominent members of the Trump administration have commented on digital assets.
As reported by Blockonomi previously, President Donald Trump himself claimed that cryptocurrencies like Bitcoin can “facilitate” illicit activity and that Libra should abide by traditional banking laws.
And Treasury Secretary Steven Mnuchin has claimed that he and other regulators “will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities.” Mnuchin also echoed Pompeo’s line, stating:
“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.”
Regulatory Oversight Already Happening
While Mnuchin and Pompeo are making it sound like this industry is entirely unregulated, this is far from the truth. The IRS, for instance, has recently begun a crackdown on cryptocurrency investors.
Also, the U.S. is part of a new consortium being established to track the users of Bitcoin and other public blockchains. The U.S. recently joined its fellow G7 members, Australia, Singapore, amongst other nations to create a platform that will collect and share the personal information of those using cryptocurrencies. An excerpt from the Nikkei Asian Review article unveiling this venture reads:
“The goal is to prevent funds from being laundered, going to terrorist organizations or otherwise being put to illicit use.”
It wasn’t revealed how the new project, which remains unnamed, would farm data from users of Bitcoin and other cryptocurrencies. Regardless, the collective is currently aiming to have a plan in place by 2020, and to have launched the project a few years later.