Steven Mnuchin, secretary of the U.S. Treasury, has no issue with the launch of the Facebook-led Libra project – as long as financial rules are followed.
“I’m fine if Facebook wants to create a digital currency, but they need to be fully compliant” with financial secrecy and anti-money laundering rules, he said Thursday, according to a Bloomberg report. “In no way can this be used for terrorist financing.”
Mnuchin was speaking in Washington, D.C. at a hearing of the House Financial Services Committee in response to a question from a lawmaker.
Since Libra was announced in June, much to the chagrin of the globe’s regulators and central banks, Mnuchin indicated he’s met with Facebook a dozen times to talk over regulatory concerns. That’s slowed the pace of the payments project’s move toward launch, he said.
Libra will be a stablecoin for payments through Facebook platforms and other wallets and products and is likely to be pegged to a basket of national currencies and government bonds.
At the hearing, Mnuchin also said the U.S. is unlikely to develop a digital currency in the near term, Bloomberg wrote.
“[Federal Reserve Chair Jerome] 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,” Mnuchin said.
The hearing saw questions over China’s plans to launch a digital yuan in the near future. The European Central Bank also made comments recently that it might launch a digital currency if traditional payments methods are not improved for consumers.
Powell has previously indicated that the Fed is evaluating a digital dollar, but the benefits are not yet clear.