In a White House press briefing, Secretary Steven Mnuchin of the U.S. Treasury spoke about the concerns associated with digital assets, including crypto-currencies such as Bitcoin or Libra. Recently, the representatives of Facebook’s Calibra Project were expected to go to Capitol Hill to discuss their proposal for a crypto-currency, the Libra. At the Treasury Department, across the U.S. government, and with the international financial community, there has been a great deal of recent activity related to the regulation and the treatment of digital assets and crypto-currencies. Mr. Mnuchin gave some brief explanatory remarks about what the Treasury has been doing on this front.
Last month, the Libra Association—a consortium of 28 businesses, including a Facebook subsidiary—announced that it is developing a crypto-currency called the “Libra.” The Treasury Department has expressed very serious concerns that Libra could be misused by money launderers and terrorist financiers. Crypto-currencies, such as Bitcoin, have been exploited to support billions of dollars of illicit activity in the form of cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use crypto-currencies to fund their malign behavior. This is indeed a national security issue.
The United States has been at the forefront of regulating entities that provide crypto-currency. The United States will not allow digital asset service providers to operate in the shadows and will not tolerate the use of crypto-currencies in support of illicit activities, said Secretary Mnuchin. The U.S. 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 crypto-currencies, the overriding goal is to maintain the integrity of financial system and protect it from abuse. The U.S. Treasury takes very seriously the role of the U.S. dollar as the world’s reserve currency and it will continue its efforts to protect country and secure the U.S. and global financial systems.
The U.S. Treasury has been very clear to Facebook, Bitcoin users, and other providers of digital financial services that they must implement the same anti-money laundering and countering financing of terrorism—known as AML/CFT—safeguards as traditional financial institutions. Money transmitters of crypto-currency must comply with the relevant Bank Secrecy Act obligations, known as BSA, and register with the Financial Crimes Enforcement Network, known as FinCEN, which is a bureau of the U.S. Department of Treasury with the mission to safeguard the financial system from illicit use, combat money laundering, and promote national security through the dissemination of financial intelligence. As money service businesses, crypto-currency money transmitters are subject to compliance examinations just like every other U.S. bank. He said, "To be clear: FinCEN will hold any entity that transacts in Bitcoin, Libra, or any other crypto-currency to its highest standards."
Mr. Mnuchin highlighted that he also recently established the FSOC Working Group on Digital Assets. This FSOC group enables U.S. financial regulators, such as FinCEN, FED, OCC, CFTC, CFPB, SEC, and other key stakeholders to work together to combat risks posed by crypto-currencies. Given the international nature of crypto-currencies, we are also going to great lengths to ensure that effective regulation does not stop here at the U.S. border. Last month, led by the United States, the Financial Action Task Force, known as FATF, the global standard-setter for AML/CFT, adopted comprehensive measures on how countries must regulate and supervise activities and providers in this space. This was a major step toward harmonizing international regulations concerning crypto-currencies. There has been extensive work at the G20 and this issue will be addressed again this week at the G7 Finance Minister in France.
Related Link: Statement
Keywords: Americas, US, Banking, Crypto Assets, Libra, Facebook, Fintech, AML/CFT, US Treasury
Previous ArticleECB Publishes Results of Survey on Credit Terms and Conditions
Next ArticleEC Report Reviews Application of BRRD and SRMR in EU
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.