Don’t Want Crypto to Become the Next ‘Swiss Numbered Bank Accounts’: U.S. Treasury Secretary
Steven Mnuchin says preventing usage of cryptocurrencies for illicit activities is a major concern.
The United States Secretary of the Treasury Steven Mnuchin has stated that his department’s top priority in regards to cryptocurrencies is making sure they are kept out of the hands of criminals.
Speaking during a moderated discussion at an event hosted by the Economic Club of Washington, Mnuchin claimed his department was “very focused on cryptocurrencies”, and working toward ensuring that “bad people cannot use these currencies to do bad things”.
Mnuchin hinted at tighter crypto regulations in the future, claiming the Financial Stability Oversight Council had formed a working group focused on cryptocurrency regulation.
Elaborating further, the Treasury Secretary claimed the United States was working with G-20 countries to make sure cryptocurrencies do not become the next “Swiss numbered bank accounts”. Swiss accounts were once notorious as they were used to store funds and evade tax authorities, thanks to the country’s privacy laws. However, the situation has changed in recent times, with Swiss authorities showing greater willingness to cooperate with the IRS.
Bitcoin has a similarly controversial image as a cryptocurrency used anonymously for illicit activities on the Dark Web. However, tracking Bitcoin transactions is not entirely impossible, and other coins such as Monero and Zcash have now overtaken Bitcoin to become the cryptocurrencies of choice for criminals.
Speaking about companies that issue digital wallets, Mnuchin stated that these firms were under the same obligation as banks to ensure KYC due diligence under United States law. He asserted that they were responsible for confirming user identifies and tracking suspicious transactions that might be linked to activities such as money laundering.
Mnuchin went on to explain that another key concern was the amount of speculation in cryptocurrencies – the crypto market is known for its volatility and sudden spikes and dips in price have become the norm.
“I want to be sure consumers trading this understand the risks,” Mnuchin said. “I'm concerned consumers could get hurt.”
Some countries are looking to get a handle on the cryptocurrency situation by considering digital versions of their own currencies – Russia’s CryptoRuble and Israel’s digital version of the shekel, for example. Mnuchin, however, claimed that while the Treasury and the Fed had looked into the possibility, they did not see the need to issue a digital dollar.