Finance Minister Steven Mnuchin
Jonathan Ernst | Reuters
Finance Minister Steven Mnuchin is concerned about the cryptocurrency proposed by Facebook and its potential illegal use.
In a press conference, he said Facebook's proposed digital currency Libra could be "abused by money launderers and terrorists" and that it was a "national security problem".
"Cryptocurrencies like Bitcoin have been exploited to support billions of dollars of illegal activity such as cybercrime, tax evasion, blackmail, ransomware, illegal drugs and trafficking," Mnuchin said. He added that he was "not feeling well today" when launching Facebook.
"You have a lot to do," Mnuchin said.
The press conference takes place days after President Donald Trump said he was "not a fan" of cryptocurrencies like Bitcoin. He also suggested that Facebook, which plans to roll out a global crypto currency next year, needs a bank charter.
Bitcoin fell sharply on Monday following the president's criticism on Twitter. The world's first and most valuable digital currency fell 1
David Marcus of Facebook, leader of the digital wallet Calibra, which is used for the storage of Libra, will testify before the committee on Tuesday. The House Financial Services Committee will hold its own hearing on Libra on Wednesday. Marcus responded to questions from the US Senate Banking Committee in a letter on Tuesday that the company needed governments, central banks and regulators to properly launch the digital asset, and Facebook "can not do it alone".
Others in Washington also demanded more clarity about the Facebook project. US Federal Reserve Chairman Jerome Powell said last week that he has "serious concerns," including money laundering and consumer protection, and set up a working group within the central bank to investigate. Members of Congress of both parties have also questioned the motives of Facebook. Representative Maxine Waters, D-Calif., Chair of the House Financial Services Committee, called on the technology giants to postpone the project. This is a continuation of his "uncontrolled expansion and expansion of his reach on the lives of its users".
In June, Facebook announced it would launch a cryptocurrency in 2020, run by the nonprofit Libra Association in Switzerland. The digital asset is not fully controlled or operated by Facebook, according to the whitepaper. Instead, it is operated by a number of other stakeholders, including Uber, Mastercard, Stripe, Visa, PayPal and Spotify. Nevertheless, Facebook plans to benefit from a new subsidiary, Calibra, which is building a digital wallet to store and trade the cryptocurrency.
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– Fred Imbert of CNBC contributed to the coverage.