US Government Concerned that Bitcoin Could Become the New Version of Swiss Bank Accounts
American authorities are alarmed that the rise of cryptocurrencies could lead to a modern equivalent of Swiss bank accounts, anonymous places where the gains of illegal behaviour can be comfortably stashed.
In an interview at the Economic Club of Washington, US Treasury Secretary Steven Mnuchin warned that regulators had to ensure that “bad people cannot use these currencies to do bad things.”
American law demands that Bitcoin wallets providers go through the same Know Your Customer (KYC) regulations as banks. However, the rest of the world does not have these same restrictions. Mnuchin said that the US,
will be working very closely with the G-20 in making sure that this doesn’t become the (new) Swiss bank account.”
As Treasury Secretary, Mnuchin is also chair of the Financial Stability Oversight Council (FSOC). Founded in 2010, the role of the FSOC is to provide “collective accountability for identifying risks and responding to emerging threats to financial stability.” It includes the chairs of the Federal Reserve and Securities and Exchange Commission (SEC), among other financial luminaries. During the interview Mnuchin revealed that the FSOC had set up a working group to look at the effects of cryptocurrencies.
“Consumers Can Get Hurt”
As with many other regulators around the world, Mnuchin is concerned about volatility in the crypto markets, and that potential investors may underestimate this volatility. Referring to speculative buying of cryptocurrencies he said,
I want to make sure that consumers who are trading this understand the risks, because I am concerned that consumers can get hurt.”
Not Worried About the Petro
When asked about his opinion on whether Venezuela’s Petro or the proposed Russian CyrptoRuble might allow those countries to evade sanctions, he answered that he was “not at all” worried. “I don’t think that’s a concern,” he said.
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