Treasury Secretary Steven Mnuchin wants to make sure cryptocurrencies can’t be used like Swiss bank accounts.
“We want to make sure that bad people cannot use these currencies to do bad things,” he said Friday at an event hosted by the Economic Club of Washington. He added the U.S. is working with world leaders in the G-20 on “making sure that this doesn’t become the Swiss numbered bank accounts.”
The firms that offer bitcoin owners digital wallets to store them are subject to the same rules that require banks to confirm customer identities, he said. And the U.S. has money laundering rules. “We can track those activities. The rest of the world doesn’t have that.”
Swiss bank accounts became famous because of the country’s strict privacy rules, and they had a storied history as a haven for people dodging tax authorities, but that advantage has ended in recent years.
Bitcoin, as well, was once a favored payment method on the Dark Web, an underground economy where drugs and stolen identities are bought and sold. But law enforcement has gotten better at tracking bitcoin activity, and criminals have moved on to other digital currencies.
Mnuchin also said he is concerned about speculation in cryptocurrencies. The price of bitcoin shot up 1,200 percent last year, and other digital tokens, such as ethereum and Ripple’s XRP, have grabbed their share of attention. “I want to be sure consumers trading this understand the risks,” he said on Friday. “I’m concerned consumers could get hurt.”
Bitcoin has become such a phenomenon that central banks have begun looking into developing their own digital currencies. Russia, for one, was reported to be looking into crypto, something Mnuchin said Friday he wasn’t “at all” worried about. “I don’t think that’s a concern.”
He added that the Federal Reserve has looked into digital dollars, but “the Fed and we don’t think there’s any need for that at this point.”