In a statement undoubtedly prompted by U.S. President Trump’s comments last week regarding his stance on cryptocurrencies, U.S. Treasury Secretary Steven Mnuchin has reasserted the president’s claims, calling cryptocurrencies a “national security issue”.
In a live broadcast from the White House yesterday, Mnuchin clarified the administrations position on the emerging digital assets industry, repeating the old trope that they facilitate illegal activities. He went on to suggest that the administration somehow hopes to control the use of digital assets, saying:
“We will not allow digital asset service providers to operate in the shadows.”
Mnuchin did not go so far as to suggest an outright ban on cryptocurrencies, indicating that the administration likely understands that such a ban would not only be ineffective but would push the industry further underground. By enforcing strict regulations, the government seemingly hopes to take control of the cryptocurrency space and integrate it into the existing financial system.
On July 11th last week, President Trump made his feelings about Bitcoin and cryptocurrencies clear in a tweet that read: ” I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
The comments arose following news that social media giant Facebook is developing its own cryptocurrency, something that has been met with widespread opposition from central banks and financial authorities in the United States and other western nations.
Community reaction
The comments didn’t come as too much of a surprise to those within the crypto community and have been largely met with mild indifference. Those who have been involved in the industry for many years have become accustomed to strong government opposition and attempts at stifling regulation. In fact, many previous attempts to ban cryptocurrencies in various countries have only helped to further increase interest and adoption. Some believe these new comments from the White House will only help spread awareness and boost the cryptocurrency market.
In a formal written testimony to the Senate Banking Committee regarding Facebook’s Libra project, Forbes magazine’s Caitlin Long states:
“Digital currencies are the first major innovation in payment systems in nearly 50 years. It is imperative that the U.S. tread carefully. Fighting the trend will send innovation offshore, rather than kill it. “
Market reaction
Bitcoin appeared to be making some decent gains prior to the comments, climbing from the low $10,000 region to above $11,000 during the day yesterday. The asset has since begun a slight retracement to the mid-$10,000 range where it currently sits. It remains up by 4.1 percent in the past 24-hours, trading at $10,627 with a market cap of $188.39 billion.
The majority of altcoins followed suit but many remain in the green, with both Ethereum (ETH) and XRP up 0.7 percent and Bitcoin Cash (BCH) up 7.8 percent. Litecoin (LTC) and EOS are the only top 10 coins in the red today, down by around one percent each.
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