U.S. Treasury Secretary Mnuchin said neither he nor Federal Reserve Chairman Colin Powell believed the U.S. would need to create a digital currency. “Chairman Powell and I have discussed this — we all agree that in the near future, the Fed will not need to issue digital currencies for the next five years,” Mnuchin said Thursday at a House Financial Services Committee hearing. ”
Other central banks have discussed the creation of digital currencies. The ECB is currently looking at whether to develop its own digital currency if the private sector fails to make cross-border payments faster and cheaper.
Mnuchin said he and Powell talk weekly, including at a meeting of the Financial Stability Oversight Council on Wednesday. They also spoke early Thursday about the buyback market.
Mnuchin’s comments on the digital currency were in response to questions from lawmakers about Facebook Inc.
When Facebook announced earlier this year that it would create a cryptocurrency called Libra, global regulators and policymakers were surprised. While the social networking company has explained that its digital currency can help the financial system open to the world’s poor and people who cannot be cared for by banks, others have expressed concern about the possibility of it being used by terrorists or other criminals.
“If Facebook wants to create a digital currency, I don’t have a problem with that, but they need to comply fully with bank secrecy and anti-money laundering rules,” Mnuchin said. And this must not be used to finance terrorism. ”
Mr Mnuchin said he had held more than a dozen meetings with Facebook because of regulatory concerns, slowing the company’s progress in that area.