U.S. Secretary of State Michael Pompeo expressed his belief that cryptocurrencies and other crypto assets should be regulated in the same way that SWIFT and other financial institutions are. He made these comments in an interview with CNBC’s Squawk Box on Tuesday (transcript).
Regulation of crypto assets has been a hot topic in the crypto community for a while now. Crypto-focused institutions have been clashing with financial regulation institutions all over the world. Pompeo’s comments might be an indication of what the crypto community can expect in the future in terms of regulation.
When asked the question ‘How best to regulate Facebook’s Libra or bitcoin?’ Pompeo responded:
“My sense is this: We should use the same framework that we use to regulate all other electronic financial transactions today. That’s essentially what these are. These are monies moving through markets, or in some case disintermediated transactions.”
He went on to say that the same rules that apply to transactions through SWIFT and other financial institutions of the US should also apply to transactions carried out through crypto assets.
Pompeo also talked about cryptocurrencies’ role in money laundering and financing terrorism. He argued that going in the direction of anonymous financial transactions would jeopardize the world’s security.
“The risk with anonymous transactions is one that we all know well. We know this from 9/11 and terror activity that took place in the 15 years preceding that, where we didn’t have good tracking; we didn’t have the capacity to understand money flows and who was moving money,” Pompeo said and went on to concluded, “We need to preserve a financial system, a global financial system, that protects that.”
Slow Progress in Regulating Crypto
There has been a lot of progress over the last couple of years regarding regulation in the crypto industry. Many countries are coming up with comprehensive and thorough legislation to help clear the air for the institutions working in the field. These rules are only expected to improve over time through incremental updates. So, it’s safe to say that we are moving in the right direction so far.
While cryptocurrencies have been attached to many stories of fraud and theft, the reason for these problems is not inherent in cryptocurrencies. It is the outcome of a slow reaction from government institutions that were supposed to protect citizens from fraud by clarifying the legislation for cryptocurrencies.
Instead, the institutions laid relaxed and in denial that cryptocurrencies could ever be of any importance to the world. A situation that put hurdles in the crypto community’s path and favored their rival financial institutions like banks. So, if it’s anyone’s fault that cryptocurrencies are being used in such crimes, it’s of government officials who not only didn’t anticipate the rise of crypto, but continue to ignore this remarkable financial digital phenomenon.