Trump To Release New Crypto Regulations, Preventing Their Use As ‘Secret Bank Accounts’

  • Treasury Secretary Steven Mnuchin reveals during the Senate Finance Committee hearing that new regulations are coming
  • Every major central bank in the world is doing a deep dive on digital currencies, and it is the Fed’s responsibility to be at the very forefront of knowledge and thinking about a CBDC – Federal Reserve Chairman Jerome Powell

The Trump administration is all set to release the new regulations related to digital currencies and digital payments systems revealed Treasury Secretary Steven Mnuchin on Wednesday in a Senate Finance Committee hearing. Mnuchin said,

“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.”

The department's Financial Crimes Enforcement Committee is preparing rules that will improve the transparency and prevent cryptos from being used as “secret bank accounts,” Mnuchin told lawmakers. Mnuchin said,

“We want to make sure that technology moves forward; on the other hand, we want to make sure cryptocurrencies aren’t used for the equivalent of old Swiss secret number banking.”

A bureau of the US Department of the Treasury, The Financial Crimes Enforcement Network (FinCEN) collects and analyzes information about financial transactions to combat money laundering, terror financing, and other financial crimes.

In the budget proposal released this week by the White House, the administration cited cryptocurrencies as “an emerging threat” and the importance of the Treasury Department and Secret Service in monitoring the use of cryptos.

He also said that he had “very serious concerns” about social media giant Facebook’s so-called cryptocurrency Libra.

Meanwhile, Digital Dollar in the Works

Mnuchin also said that he along with Federal Reserve Chairman Jerome Powell do not think the US needs a central-bank digital currency though they could consider it again “down the road.”

These comments came after earlier in the day Powell told the Senate Banking Committee that Facebook’s Libra “lit a fire under” their research on the central bank digital currency or CBDC and they are “working hard” on it. However, they won’t be issuing a digital currency yet.

“The benefits would include perhaps greater financial inclusion, lower costs, more convenience,” Mr. Powell said, noting the risk for more fraud and reduced privacy as well.

“There’s a lot to weigh and a lot to work on there. Every major central bank in the world right now is doing a deep dive on digital currencies, and we think it is our responsibility to be at the very forefront of knowledge and thinking about a central bank digital currency.”

Depending on the design of the currency, Powell said the Fed might need approval from Congress to move forward if they conclude “we need more authority.”

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