U.S. Treasury Secretary Steven Mnuchin said he will work with the Group of 20 nations to prevent cryptocurrencies such as bitcoin from becoming the digital equivalent of an anonymous Swiss bank account.
Speaking to the Economic Club of Washington today, he said wants to ensure “bad people cannot use these currencies to do bad things.”
Under U.S. law, “if you have a wallet to own bitcoins, that company has the same obligation as a bank to know” you as a customer, Mnuchin said. “We can track those activities. The rest of the world doesn’t have that, so one of the things we will be working very closely with the G-20 is making sure that this doesn’t become the Swiss bank account.”
Mnuchin said U.S. authorities, including the Federal Reserve, were studying the pros and cons of issuing digital dollars instead of hard cash, but “the Fed and we don’t think there’s any need for that at this point.”
Mnuchin also said that he is “not at all” worried that Russia may use cryptocurrencies to help its banks avoid international sanctions. An adviser to President Vladimir Putin is reported to have said that sanctions against Russia have created a need for digital currencies as officials there fear expansions in 2018.
Virtual currencies such as bitcoin, which has soared in price in recent months amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.
Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.
“This idea that Russia or Venezuela can thwart the pressure from sanctions just by developing their own cryptocurrency is silly,” said lawyer Erich Ferrari of Ferrari & Associates in Washington. “It’s like trying to do it by using cash. Yes you can do it more easily with cash, but it doesn’t mean you’re evading. It’s harder to get caught.”