Steve Mnuchin, the secretary of the U.S. Treasury, has revealed he is “fine” with the launch of the Facebook cryptocurrency Libra, as long as it follows strict financial rules.
Per a report 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 said”
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.
Mnuchin revealed he has met with Facebook various times to discuss regulatory concerns. 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. The support 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%).
Mnuchin also talked about the U.S. developing its own digital currency, and noted that both he and Federal Reserve Chairman Jerome Powell do not 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.
It is worthy of note that the European central bank, according to a report, may launch its own digital currency if cash usage drops.