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US Treasury Secretary Sees Libra As National Security Threat

U.S. Treasury Secretary Steven Mnuchin believes that Facebook’s proposed cryptocurrency could pose as a national security threat.

In a press conference on Monday (July 15), Mnuchin warned that Libra “could be misused by money launderers and terrorist financiers” and that it was a “national security issue.”

“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs and human trafficking,” Mnuchin said, adding that he is “not comfortable today” with the social media giant’s planned launch.

“They have a lot of work to do,” he said, according to CNBC.

Mnuchin added that the Treasury has informed Facebook, as well as other cryptocurrency users, that they need to implement the same anti-money-laundering and counter-terrorism safeguards as other financial institutions.

“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,” he said. “We will not allow digital asset service providers to operate in the shadows.”

In response to Mnuchin’s comments, Facebook told CNBC that “they anticipated critical feedback from regulators, central banks, lawmakers around the world.” The tech giant also said they announced Libra’s a year in advance, “so that we could have those conversations.”

And earlier this week Libra Head David Marcus told U.S. lawmakers in a prepared testimony that there will be no launch until regulatory concerns are discussed. He added that the crypto is not intended to compete with principal currencies and won’t interfere with monetary policy.

“The Libra Association, which will manage the (Libra) Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena,” Marcus said in a prepared testimony posted by the Senate Banking Committee. “Monetary policy is properly the province of central banks.”

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