Swiss Bank Account' & Risk For People: What US Treasury Secretary Thinks of BTC

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Recently the US authorities started keeping an eye on bitcoin and even extended their wishes to become cryptocurrency watchdogs, as the country’s Commodity Futures Trading Commission did. Last week the agency’s leader J. Christopher Giancarlo named its accomplishments at the meeting with staff. One of them, as he mentioned was the fact that the body became cyber currency supervisor.

Roughly the same day Steven Mnuchin, the country’s Treasury Secretary, expressed a concern that bitcoin could become another ‘Swiss bank account’, used for money laundering. Being interviewed at the Economic Club of Washington, he also said that his department is concentrated enough on BTC and its brethren.

Mnuchin’s Unrest

In a conversation with the club’s moderator David Rubenstein, Mnuchin pointed out at his two primary concerns related to bitcoin:

  • the use of bitcoin for vicious purposes
  • the risks which bitcoin bears for investors

Money Laundering

So let’s move step by step. Firstly, the US Treasury Secretary is worried that virtual money can be used by people for malicious purposes, meaning that bitcoin has a potential to become an offshore bank account for moving money out of any country.

Mnuchin emphasized that if in the US tax authorities and other watchdogs have a legal opportunity to trace bitcoin transactions, this might not be possible in the rest of the world. So that’s where underlies the pitfall.

For instance, the US there is a policy for wallet providers which have the right to know their customers. Hence, the country’s government can prevent or interrupt the money laundering and other abominable activities. But once again, not every nation on earth can afford that due to maladministration, lack of legal control, insufficient supply of such projects, etc. That’s why Mnuchin called for the collaboration with G20 states on this issue.

“If you have a wallet to own bitcoins, that company has the same obligation as a bank to know you as a customer. We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss numbered bank account,” Mnuchin explained.

People’s Fortunes At Stake

The second US Treasury Secretary’s concern is the fact that bitcoin can indeed hurt people given the risks it carries. It is not a secret that there is a lot of speculation on the cyber money market, which drives customers to purchase, sell or trade cryptos. Speculation is what fueled lots of economic bubbles, and Mnuchin doesn’t stay aside when it comes to this problem. So in his opinion, people should be aware of risks when piling into bitcoin or its ilks.

Evasion of the US Sanctions

At the beginning of this year January, the respective online newspaper The Financial Times, citing Moscow officials, informed that the Russian President Vladimir Putin allegedly authorized the country’s state agencies to work on the national cyber currency ‘cryptoruble’. The aim of this could be Putin's plans to skew the US economic sanctions, imposed on Russia for intervention in Ukraine and US elections 2016 interference.

When asked the question, whether it would be possible for Russia or any other country to dodge the US economic sanctions by creating own digital currency, Mnuchin responded that this issue is not a concern at all.

As US Treasury Secretary said, there are only two ways of running cryptocurrency:

  • There are bitcoin and its brethren, used by ordinary people who aspire diversity in payment means and so on
  • There could be issued cyber coins by central banks of the countries in case they want to shorten the use of cash and turn to digital assets

Therefore, Mnuchin stated, that’s not what bothers his department at the moment.

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