Treasury chief: Facebook currency plan ripe for illicit use

WASHINGTON (AP) — The Trump administration came out strongly today against Facebook's ambitious plan to create a new digital currency, as the Treasury chief warned it could be used for illicit activity such as money laundering, human trafficking and financing terrorism.

Treasury Secretary Steven Mnuchin expressed "very serious concerns" about the currency proposed by the social network giant, to be called Libra. "This is indeed a national security issue," Mnuchin told reporters at the White House.

His comments came a few days after President Donald Trump tweeted that Libra "will have little standing or dependability."

Trump, fresh off a "social media summit" he led at the White House that gathered conservative critics of Big Tech, tweeted last week: "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. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity."

If they want to get into the financial business, Facebook and its dozens of partner companies in the venture will have to accept the kind of tight regulation that banks are under, the president said.

The Treasury chief's comments went further, though, tying Libra directly to concerns over potential use for money laundering, drug and human trafficking, tax evasion and other crimes.

Facebook has "a lot of work to do before we get to the point where we're comfortable with it," Mnuchin said.

On Tuesday, Congress begins two days of hearings on Facebook's Libra plan. The head of the Federal Reserve also raised an alarm about the plan last week.

Facebook's plan "raises a lot of serious concerns, and those would include around privacy, money laundering, consumer protection, financial stability," Fed Chairman Jerome Powell said in congressional testimony. "Those are going to need to be thoroughly and publicly assessed and evaluated before this proceeds."