US Treasury Secretary Steve Mnuchin. Photo: Reuters/Kevin Lamarque
US Treasury Secretary Steve Mnuchin says new regulations governing cryptocurrency will be announced soon. Photo: Reuters

The Trump administration plans to introduce regulations for cryptocurrencies that are intended to crack down on their use in facilitating money laundering and other illicit activities, Treasury Secretary Steven Mnuchin said on Wednesday, according to a report in The New York Times.

Mnuchin told lawmakers that the regulations were being developed with other agencies and financial regulators to improve transparency surrounding digital currencies like bitcoin. The administration has expressed growing concern over the use of such currencies to anonymously execute illegal transactions and potentially evade American sanctions on countries like Iran.

“We are about to roll out some significant new requirements,” Mnuchin said during a hearing before the Senate Finance Committee. “We want to make sure that technology moves forward; on the other hand, we want to make sure cryptocurrencies aren’t used for the equivalent of old Swiss secret number banking.”

Mnuchin did not provide details of what the regulations would entail. He said that they would provide greater transparency so that law enforcement could see where money was going and ensure that it was not being used to aid money laundering.

A commentator in The XRP Daily observed: “One could speculate that because many large cryptocurrency companies are planning to IPO in the US stock markets, like Bitmain and Ripple, [that] perhaps the US wants to be ahead of China when it comes to digital currency innovation.”

After playing down the risks of cryptocurrencies at the beginning of President Donald Trump’s term, Mnuchin said over the summer that they posed a national security threat. He also said that he had “very serious concerns” about Libra, the digital currency that Facebook is developing, said the report in The Times.

President Trump has also expressed skepticism about cryptocurrencies, declaring last year that he was “not a fan” and that their value was volatile and “based on thin air.” He warned at the time that Facebook must seek a banking charter and follow all bank regulations if it wanted to be in the digital currency business.

As part of his effort to more closely police cryptocurrencies, Mnuchin has been pushing to relocate the Secret Service back to the Treasury Department from the Department of Homeland Security. In the budget proposal the White House released this week, the administration cited the importance of the Treasury Department and Secret Service working together to monitor the use of cryptocurrencies, which it cited as “an emerging threat.”

“If we conclude that we need more authority, and that this is something appropriate to do, then we’ll ask for that authority,” he said.

Though the Democratic presidential race in the United States may have lost Andrew Yang, its most forward-thinking candidate when it comes to cryptocurrency, that doesn’t mean it’s not still a hot button issue across party lines, Cointelegraph reported.

The number of patents and companies associated with cryptocurrencies and blockchains continues to rise in the US market, making it both an economic and political issue in 2020.

Military contractors in the United States have already shown their willingness to support companies embracing blockchain.

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