The secretary of the U.S. Treasury, Steve Mnuchin, has revealed he is “fine” with the launch of the Facebook-led cryptocurrency Libra, as long as the project follows strict financial rules.
According to a report published by Bloomberg, Mnuchin revealed his thoughts on the Libra cryptocurrency while speaking in a Washington, D.C. hearing of the House Financial Services Committee, responding to a question from a lawmaker. He was quoted as saying:
I’m fine if Facebook wants to create a digital currency, but they need to be fully compliant. In no way can this be used for terrorist financing.
Since Libra was announced back in June of this year, Mnuchin revealed he has met with Facebook various times to discuss regulatory concerns, something that slowed the cryptocurrency’s pace towards its launch, expected in 2020.
The cryptocurrency is set to be governed by the Libra Association, and is reportedly going to be backed by fiat currencies and short-term U.S. Treasury bonds. Its backing in terms of fiat is set to consist of the European euro (18%), the Japanese yen (14%), the British pound (11%) and the Singaporean dollar (7%).
During the hearing, Mnuchin also addressed the U.S. potentially developing its own digital currency, and noted that both he and Federal Reserve Chairman Jerome Powell don’t see a need for it in the near future. Mnuchin stated:
Powell and I have discussed this – we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency.
The European central bank, according to a report, may launch its own digital currency if cash usage drops and is the private sector fails to create an efficient solution for cross-border payments, which the financial institution deemed too expensive.
Featured image via Unsplash.