Testifying before the U.S. Senate Finance Committee, Treasury Secretary Steven Mnuchin recently told lawmakers that the administration plans to introduce new regulations on the use of Bitcoin and other cryptocurrencies.
His Feb. 12 testimony is the latest in a series of high-ranking public officials, including IRS Criminal Investigation Chief John Fort, to signal regulations and subsequent enforcement of cryptocurrencies are on the way.
“We are about to roll out some significant new requirements,” Mnuchin said. “We want to make sure that technology moves forward. On the other hand, we want to make sure cryptocurrencies aren’t used for the equivalent of old Swiss secret number banking.”
According to Mnuchin and other officials, the regulations will target cryptocurrency’s potential to be used as a means for money laundering and other criminal activities. The move comes at a time when cryptocurrencies continue to make steady in-roads into the independent ATM marketplace through both dedicated units and software enhancements. And, as some in the industry have pointed out, it is also unclear how regulations will impact the progress being made on the bank account closure crisis.
At present time, the Federal Reserve is studying the potential benefits and pitfalls of the U.S. developing its own digital currency.
“The benefits would include perhaps greater financial inclusion, lower costs and more convenience,” said Fed chairman Jerome Powell. “There’s a lot to weigh and a lot to work on there. Every major central bank in the world right now is doing a deep dive on digital currencies, and we think it is our responsibility to be at the very forefront of knowledge and thinking about a central bank digital currency.” However, as Treasury officials noted, even if approved, a sanctioned digital currency would be several years in the future.