In a recent briefing at the White House, the US Treasury Secretary raised concerns over cryptocurrencies due to the threat they pose to the financial system and their involvement in criminal activity. Mr Mnuchin advised that he had “serious concerns” surrounding cryptocurrencies, particularly the one being developed by Facebook, which Donald Trump’s administration has said they are not comfortable with their plan to introduce their digital payment system called Libra.
Mr Mnuchin told reporters “This is indeed a national security issue. Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”
In recent years, Bitcoin has become the go to currency for cyber criminals behind ransomware attacks where victims lose control of their device to a remote hacker. Once control is lost, the only way for the victim to regain control of their device is to send a Bitcoin payment. Many large organisations have lost control of their computer networks recently as a result of inadequate security measures and become the victims of ransomware attacks.
Despite the spike in popularity, little has been said by the Trump administration in the last couple of years regarding cryptocurrencies, but the Facebook announcement of Libra seems to have caught the attention of the White House.
Facebook, who do not plan to release Libra until next year, have designed it to be run by a Swiss association which is governs many companies and partners, rather than Facebook itself. When they announced Libra they said that it already had 27 big player partners, including Uber and Mastercard, however they have remained silent on this since.
Mr. Marcus, Facebook executive, said “We know we need to take the time to get this right, and I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
Facebook have addressed the concerns of the government surrounding its plan for Libra by highlighting their desire to work with regulators and central banks to overcome any of their concerns.
