Thanks Facebook: Mnuchin Says Crypto is “National Security Issue”

I said almost a month ago that we should expect to hear more politicians chime in on the evils of crypto now that Facebook has announced their plans for Libra, and boy did I call it. With David Marcus, the head of Libra, facing two days of Congressional hearings this week and even President Trump throwing out his two uneducated cents earlier, it was already a week full of interesting quotes out of Washington, and now the Secretary of the U.S. Treasury has thrown out some rather strong words against the industry.

At a press conference on Monday, Steve Mnuchin said, “This is indeed a national security issue. Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking.”

He added that Libra “could be misused by money launderers and terrorist financiers,” echoing sentiments expressed last week by U.S. Federal Reserve chairman Jerome Powell. In his semi-annual testimony before the U.S. House of Representatives Financial Services Committee regarding monetary policy, Powell said that “Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability.”

Just barely two months ago there was little-to-no public comment from Trump regarding cryptocurrency, and the same could be said for many of the 2020 candidates. However, thanks to Facebook throwing their rather large hat into the ring, a hat that many on both the Right and Left are saying may already be too large, we’re starting to see opinions being formed.

Thankfully, not all of them are negative.

In Tuesday’s hearing, Committee Chairman Mike Crapo asked about the possibilities of Libra’s underlying blockchain technology and seemed genuinely interested in the possibilities. Additionally, a few other members seemed to be more open-minded regarding the project itself, or at least had a basic understanding of what it could mean if implemented properly.

Since Powell said last week that Libra “needs a careful look, so I strongly believe we all need to be taking our time with this,” it’s doubtful that this week’s two-day hearing will be the last. While Trump has yet to voice any additional input, with Mueller’s testimony still looming and today’s House vote to condemn his racist tweets, not to mention the impact the arrest of Jeffery Epstein has appeared to have had on his demeanor, he may just have too much demanding his attention at this point.

It’s crystal clear that the mass majority of these folks have zero clue about cryptocurrency and blockchain in general, with a good portion of them seeming to be stuck in the days of Silk Road. With so many of them seemingly dead set against anything having to do with Facebook, Google, or Amazon, unless it’s dealing with their breakup, I highly doubt that many of them will actually investigate any further.

What does this mean for the industry?

In the short term, nothing. In the long term, it’s anybody’s guess. Trump will likely form yet another committee to specifically look into crypto and blockchain and there’s absolutely NO telling where that would go, so as I seem to be saying a lot lately, the next few weeks and months will be interesting.