tv Treasury Secretary Steven Mnuchin Briefing on Cryptocurrency CSPAN July 15, 2019 11:30pm-12:01am EDT
recently as you know there's been a great deal of interest about digital assets including crypto currency such as that claim and libra. there are many regulatory and supervisory question regarding virtual assets and virtual currencies but i will focus narrowly on the concerns the treasury has regarding the
growing misuse of the currencies via money launderers, terrorist financiers and other bad players. this week representatives of the project will go to capitol hill to discuss the proposal for a crypto currency. at the treasury department across the u.s. government with the international financial community, there's been a great deal of activity recently related to the regulation and treatment of digital assets in crypto currency. i'd like to give some brief explanatory remarks about what we have been doin been giving bt since there's lots of interest and then i will open up questions. last month the association, a consortium of 28 businesses including a facebook subsidiary announced it is developing a crypto currency. the treasury department has expressed very serious concerns
that libra could be misused by money launderers or terrorist financiers. crypto currency have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ran somewhere, illicit drugs, human trafficki trafficking. many players attempted to use this to fund their aligned behavior. this is indeed a national security issue. the united states has been at the forefront of regulating entities that provide crypto currency. we will not allow digital asset service providers to operate in the shadows and operate the use of the crypto currencies and suffered its illicit activities. treasury has been very clear to facebook, users and other
providers of digital financial services that they must implement the same anti-money laundering and comforting financing of terrorism known as aml cft safeguards as traditional financial institutions. transmitters of the crypto currency must comply with relevant bank secrecy act obligations known and register with the financial crimes enforcement network. many people are not familiar with this. it is a bureau of the u.s. department of treasury. the mission is to safeguard the financial system from the illicit use, combat money laundering and to promote national security through the dissemination of the financial intelligence. last year alone it collected over 20 million records and has
collected over 300 million in the last 11 years. it implements the bank secrecy act and has federal regulatory supervisory and enforcement authority over money service businesses and banks. the rules governing the money service providers apply to the physical and electronic transactions alike. as money service businesses, crypto currency money transmitters are subject to compliance examinations just like every other u.s. bank. to be clear, they will hold any entity that transacts in this claim, libra or other crypto currency to the high standards. i reestablished the working group on digital assets. this group enables u.s. financial regulators such as
finsin, thad, occ, cftc, cfp b., sbc and other key stakeholders to work together to combat risks posed by crypto currencies. as the president has said, it is highly volatile and based on thin air. we are concerned that the speculative nature bit coin and will makof bit coinand will mak. financial system is protected from fraud. given the international nature of the currencies, we're also going to great lengths to ensure that effective regulation does not stop here at the u.s. border. last month led by the united states, the financial action task force known as sat of the global standard center for aml cft adopted company that measures on how countries must regulate and supervise activities and providers in the space. this was a major step towards harmonizing international regulations concerning crypto
currencies. we've also had extensive work at the chi 20, and i will be addressing this again this week at the g7 finance ministers in france. to be clear, the u.s. welcomes responsible innovation including new technologies that may improve the efficiency of the financial system and expand access to financial services. that being said, with respect to the other developments in the crypto currencies the overriding goal is to maintain the integrity of the financial system and protect it from abuse. treasury takes very seriously the role of the u.s. dollar as the world's reserve currency and will continue our efforts to protect our country and secure the u.s. and global financial systems. with that i know there's a lot of interest in the subject and perhaps a few others so i will take a few questions. >> two questions for you if you
don't find. they said they would be meeting to discuss the products specifically. has that happened yet and second, they talk about facebook putting the product down. if facebook is a able to come and do you want them to see the currency? >> the first comment we either at the principals level order of the deputies level have had multiple meetings across the regulators with representatives of facebook and expressed our concerns. we also have multiple meetings of the working group i think you know we meet weekly and talk about this extensively so there are these discussions going on but will continue to go on. again to the extent facebook can do this correctly and can have a
payment system correctly that's fine they've got a lot of work to convince us to get to that place. can you address raising the debt ceiling? >> i'm sure there's a lot of interest in it as well but why don't i take a bunch of crypto currency questions and come back to that. i will give you that would let me ask the question. how does that play into your concern and what is your level of concern with facebook having libra? >> we have concerns with the privacy issues. issues. there's been items in the press about potential settlements are not going to comment on that, but obviously the regulators one of them as i said most people haven't heard of fincen to one of the reasons i want to explain this is whether they are banks
or non- banks they are under the same regulatory environment and we will hold them accountable and they will have to convince us of the very high standards before they have access to the financial system. >> the president essentially accused the social media giants of an animus. it isn't a result of the threat to social media giants are biased against. >> what i will tell you is the president doeif thepresident dos it relates to bitcoin and crypto currency and those are legitimate concerns we have been working on for a long period of time that we are not going to target any one entity whether you walk into a money service provider or bank or do it digitally you have to adhere to the same rules.
i tell them to be careful. they should be clear about why they are investing. there's a lot of good things to invest in. but our number one issue is we don't want bad actors using this. that is our number one issue i think to a large extent they have been dominated by the illicit activities and speculation will make sure the general public investors understand what they are investing in and whether it's the other regulators with proper disclosures. >> i didn't say i was comfortable with them launching the currency. >> let me just be careful as i said they and others have a lot of work to do before they get us comfortable.
>> are they being candid about the administration. >> they are being candid about where they are. i'm not going to publicly speculate how long i think it will take them to get to the point where we are comfortable with it but they are a long way away from him again part of it ais there's been a lot of public interest and that's why i want to give them the assurance before they or anyone else does this we are going to make sure the financial system is protected and as i sai said thes a lot of the illicit activity that will be shutting down for people that are using the crypto currency for bad purposes. >> [inaudible] think there's enormous agreement as i said i was in orlando i think it was two weeks ago the u.s. just finished the presidency as i gave the keynote
address their that was adopted. that is the largest organization much bigger than the chi 20 and is kind of the gold standard for aml and those rules were adopted and apogee 20 and the g7, we have absolutely general agreement that in the u.s. if you deal with the financial system you have to adhere to the same rules and that's something the rest of them are very focused on. >> you said you would pick questions on a number of subjects. >> i'm first going to finish the crypto currencies. you said at th that the treasurs concerned about the bad actors such as bitcoin which has become popular. what sort of actions is the treasury taking to stop them from using these currencies?
>> as it relates to any specific group, i'm not going to comment on any specific group of what i will tell you is they have multiple investigations going on. there have been enforcement actions that will be more enforcement actions we are going to be for our resources for the regulatory oversight. this is something we are focused on and on top of. >> what specifically are you looking for out of the finance ministers meeting on this and are you confident that you will get a statement? >> my understanding is there will be a chairman's report. we have working groups this has been in the notifications i think we have a lo have a lot ot in the digital tasks [inaudible]
speak about this is because there has been lots of activity that's been going on for the last year on this, and whether it's congress or other areas of the press, because of libra it's called a lot of attention and people were not aware of all of the work that's been going on. so, that is the purpose. >> anymore before we move on >> i wonder if you can be specific to the actions referred to can you give us some exampl examples? >> be legitimate entities attached are indeed subject to the customer rules if you are
looking to go through those entities and go on the dark darb you think you are not going to get caught, you are going to get caught, so this is a warning if you want to use it for speculation if you want to use it for illicit activities you're going to put the effort of the treasury and regulators onto that. >> this is intended to be a level playing field whether you are a money grandma or bang or online or paypal if it's intended to be a level playing field away from the traditional banks for the electronic payment systems lots of people use electronic payment systems in dollars very effectively, and do
he suggested it is done out of pure political correctness i take it we are now going to switch of the crypto currency so i will give you the benefit of that and then i will give you some brief debt ceiling i'm sure there is interest in a. a. there is a lot of misinformation on this issue and i've received letters getting accused of postponing this and everything else. so again this is a nonpolitical situation with the primary objective of changing the currency to stop counterfeiting and if you look at the hundred dollar bill and what went into the hundred dollar bill, that was over a ten year process. what people don't understand is when it comes to counterfeiting and begin protecting the currency is my responsibility there are multiple ways we
protect the currency. some of these are physical things that you can see like when you look at the hundred dollar bill and the threat there are security features that you can't see. there are security features that are limited to the government being able to see so we don't advertise what all the security features are but these are very complex things that once they are developed then require different machinery to be made in a different manufacturing process of the new curtains he isn't going to come out for a long period of time when people talk about the design, and begin the design starts with the security features. there were some way with culture luminarwhat i wouldcall culinaro sign and again even in the most optimistic scenario of me saying through the second term i'm not staying past the president's second term discrepancy isn't going to com come out of this it a political issue and again we
are [inaudible] >> you say it's not a political issue but with all of the controversy right now as it relates to things that happened before is this an issue? >> matter of fact we are going to do more research at the appropriate time we will addre address. if at the naacp convention. >> i not aware of whether he's going to that or not but i would like to talk about the economy the economy is having fabulous it's a bright spot of growth. this will address some of the
colleagues questions. you are the member of the cabinet and i want to know your concerns that people see that. >> again what i'm going to say is we have a lot of important topics. i've already answered my one comment on this i think i was clear on this. >> i'm asking a different question. i think my answer is the same. >> i would like for you to speak to it directly. >> i think that the president clarified his comment. i understand what the comment is. i'm not concerned by the president's comment and again that's the last comment i'm going to make on this issue. we have other important things to talk about. are you planning to raise the debt ceiling and wall that take place before? >> now we are on a very important issue.
as you know i can't raise the debt ceiling. that is congress's job to raise the debt ceiling. given the importance of this, we run multiple scenarios of how we predict the government's cash flow. i hope everybody would agree to the extent we want to limit spending, congress has the right to limit spending but once we agree to spend money we have to pay for it in the credit of the government as the utmost importance so the debt ceiling has to be raised and one of our scenarios triggers a problem in the first week of september before they get back so i have urged congress to raise it before they leave. i don't see the government shutdown moving. again, that's not an issue until the end of september, and i have no expectation that there will be a government shutdown whatsoever.
>> is the short term extension ishort-term extensionif you arel is that on the table and can you describe the nature of your negotiations with speaker pelosi on this issue do you have that phone conversation on saturday night? connect the speaker and i have been speaking regularly. we've had very productive discussions. i also spoke to mitch mcconnell and kevin mccarthy and others over the weekend. i've been working very closely with nick and i had daily conversations with the president this morning we updated him and i expect to speak to him again later today. i think there is a preference on both parties to the extent that we can agree on the debt ceiling and a budget deal that that is the first choice, and i think we are getting closer. i would comment the president very much cares about the va. i'm just commenting in regards
to the speaker's comments. the military versus the defense versus non- defense tends to be viewed as a republican versus democrat issue can we spread it around? the president said he's not concerned -- any concern in the administration which white nationalists seem to find a common cause again i'm happy now
complicated as the topline number we want to do a two-year deal. this typically offsets that have been negotiated as part of the deals have begun every single time. i am hopeful that we can come to a agreement quickly but having said that the ambassador and i have had several conversations with our counterparts we expect to have another principal level this week to the extent we make significant progress i think there's a good chance we will go there later. of course i expect it to be raised on time because i would say both parties there is no uncertainty that either party
nor anybody wants to put how does the president feel at this point and how do we feel about the job of secretary is doing a >> i have every reason to think that the secretary is doing a good job. secretary ross has been an important part of the team and this has been an integrated team. the president is very pleased and i would say we would like to see a very important economic