Cryptocurrencies: “A National Security Issue!”
As this article is being written, Treasury Secretary Steven Mnuchin is giving a live briefing to address the current regulatory issues government is creating towards cryptocurrencies, mainly the announcement of Libra coin, which (alongside other digital assets) could theoretically further undermine the current structure of the financial system.
Some of the concerns coming from Mnuchin about Bitcoin, Libra, and other cryptocurrencies involve the potential for money laundering, cybercrime, and tax evasion. Mnuchin conveniently skips the crimes and misery conducted for centuries under government-issued currencies, such as the dollar, pound, and so on!
Within the first few minutes of the briefing, cryptocurrencies are deemed as a “national security issue” and a call for all users of Bitcoin to comply under “effective regulation” is made.
Making an Example of Libra!
It’s harder to pinpoint other cryptocurrencies. Anyone can download Bitcoin, Litecoin, or Ethereum’s software and run it on a secure and private server or build applications with it and make it open source for the public.
Because of Libra’s centralized architecture and easy-to-find leaders, it makes an easy target for authorities to make an example of, showing what happens when innovators dare to try and sidestep the dollar-powered financial empire and create their own unit of value.
Stating that Swiss financial authorities are overseeing Libra’s development and distribution, David Marcus, head of Facebook’s blockchain subsidiary, has released a prepared testimony before Congress this week.
“To be clear, the Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA).
We have had preliminary discussions with FINMA and expect to engage with them on an appropriate regulatory framework for the Libra Association.
The Association also intends to register with FinCEN as a money services business.” – Released Testimony, Page 4
Most cryptocurrencies operate in a decentralized manner, making them a much harder but not impossible target for clampdowns.
The U.S. Government wants to ban technology companies from issuing and developing cryptocurrencies, or it could simply be that nobody in government trusts Facebook with controlling a currency!
All of this is in the wake of Trump’s historic and somewhat negative tweet about Bitcoin and other cryptocurrencies. Prices of cryptocurrencies have taken a tumble, but investors and enthusiasts of the emerging asset class are seeing this as a huge victory.
Regulatory clarity is key for adoption going forward but regardless of this, cryptocurrencies are going mainstream and are now having to be addressed by some of the most powerful figures in governments and institutions around the world!
This is not investment advice; please always do thorough research and only invest what you are willing to lose, especially in times of uncertainty.