Market Buoyed as US Treasury Sec Backs Trump’s Anti-Crypto Sentiments
Politicians on both sides of the Atlantic had contrasting messages for Facebook and its forthcoming Libra project, as the social network begins its grilling at the hand of both American houses of parliament.
In the United States, Treasury Secretary Steven Mnuchin told reporters at a press conference that Facebook “has a lot of work to do to convince [the American government]” that it can create a “correctly” executed payments system with “proper AML [anti-money laundering regulations].”
In the press conference, Mnuchin stated that he was “not comfortable” with the Libra project.
He also added, “Our overriding goal is to maintain the integrity of the financial system and protect it from abuse.”
On the broader subject of cryptocurrencies, the Secretary said, “We will not allow cryptocurrencies to operate in the shadows.” He also echoed comments made by President Donald Trump on Twitter last week. The President stated that cryptocurrencies were “based on thin air.”
He also said he would be looking to discuss cryptocurrencies with G7 finance leaders in forthcoming meetings.
Facebook reportedly told CNBC, in the wake of Mnuchin’s comments, that it had “anticipated” regulatory push-back, which was the reason why it had made the Libra announcement a year ahead of its scheduled rollout. The social network also reiterated that it is only “one of 28” members of Libra’s governing body, and as such is not solely responsible for the project.
Despite Mnuchin’s warnings, it looks like his comments have once again sparked optimism on the markets, with bitcoin and other tokens making sharp gains throughout and after the press conference. BTC prices are still rising at the time of writing, with the current rate on most exchanges reaching just short of the USD 11,000 mark.
Twitter users also welcomed the Secretary’s comments, much as they heralded Trump’s attack on Bitcoin and Libra – for very similar reasons.
Buy Bitcoin... Is what Mnuchin just said! https://t.co/KIlbZuQJ3W— Ran NeuNer (@cryptomanran)
Treasury Secretary Steve Mnuchin basically told everyone to follow the rules and not doing illegal things with Bitc… https://t.co/MjqWN3WLYh— Pomp 🌪 (@APompliano)
Meanwhile, in the UK, the Finance Minister Philip Hammond has stated that the government will “engage” with Facebook and Libra, and “won’t try to stop it,” per CNBC.
Hammond also stated that regulators (rather than politicians) should be the ones to determine if Facebook needs to seek out banking license permits to roll out Libra in Britain.
Hammond did add one note of caution, however, stating that “without proper scrutiny” Libra could bring about an element of “great risk” to the financial system.