The Treasury Secretary of the United States of America, Steve Mnuchin, told CNBC in an exclusive interview that G7 financial heads were not comfortable with Libra and expressed their doubts over the ability of the payment consortium to adhere to anti-money laundering (AML) and money transmission regulations. A variety of topics from the impact of the trade war and Huawei to French taxes on digital businesses were covered in the interview, July 19, 2019.
Mnuchin Makes Bold Claims
His statements regarding Libra and the reaction of the G7 to it were well in line with what most people expected, but Mnuchin made some controversial claims that quickly became the focal point of his interview with Joe Kernan.
Mnuchin told CNBC that everyone was concerned about Libra because of their inability to conduct proper AML procedures, their impact of financial stability, and the big question mark regarding customer protection.
He further went on to say that everyone who uses Bitcoin in the United States is responsible for making sure the money they receive hasn’t been laundered and that for the United States to accept Bitcoin, regulations would need to come in to ensure it is used properly without being used for illicit activity.
In a rebuttal to this, Joe Kernan asked Mnuchin how illicit activity and money laundering can be a valid criterion when cash is the dominant choice to launder money, Mnuchin hit back by saying that cash is not and has not been used for money laundering.
Steve Mnuchin, who worked as an investment banker for Goldman Sachs for 17 years and founded a hedge fund with George Soros, thinks that there is no money laundering in the current financial system – let that sink in.
Money Laundering is the Weakest Anti-Bitcoin Argument
Billions of dollars in fines for money laundering have been paid out by the top five investment banks in just the last few years. The ignorance of global regulators to call Bitcoin a fraudulent asset under the notion of strengthening money laundering is laughable.
Money laundering between two banks is much easier using cash over Bitcoin. For instance, as a bank, you have access to sufficient liquidity to hand over at least a couple of million in cash every day. This need not be recorded and since their ledgers are fully controlled by them, they can manipulate it. Where as using Bitcoin, privacy is almost nil and every transaction can be seen on the ledger. To take control of the Bitcoin ledger to erase transaction history, one would have to spend 100’s of millions to gain the necessary 51 percent hash power.
The first argument most people use to classify Bitcoin as criminal is Silk Road. Yes, Silk Road facilitated online trade of humans, drugs, and allowed people to hire contracted murders. But the way the argument gets framed makes it seems like nobody ever bought drugs or trafficked human beings before Silk Road and Bitcoin came along.