The United States Deputy Treasury Secretary argued that decentralized privately-issued digital currencies can shift some functions from the state to the private sector.

Deputy Secretary of the Treasury Justin Muzinich presented his view on the emerging ecosystem of financial intermediation and digital currencies at an annual banking and payments conference in New York on Nov. 21. The keynote past Muzinich was published on the official website of the The states Department of the Treasury.

The recent briefing was co-hosted by the U.S. Clearing Business firm and Banking company Policy Institute.

Illicit uses of crypto are "ane of the bug at the top of Treasury'south mind"

Speaking at the conference, Muzinich addressed bug associated with digital currencies alongside regulatory and tax reform and the intersection of economic policy and national security. In his statement, Muzinich continued a mutual Treasury narrative on concerns that cryptocurrencies can be used for illicit practices such every bit coin laundering.

The Deputy Secretary emphasized that these concerns remain one of the top bug apropos the authority:

"One of the issues at the top of Treasury's mind is that digital currencies tin can potentially be used to evade existing legal frameworks — similar those governing taxation, anti-money laundering, and countering the financing of terrorism."

Treasury respects innovation, only digital currencies need a "very hard look"

Muzinich stated that the Treasury values innovation and welcomes efficiency improvements, but stressed that innovation powered past digital currencies needs a "very hard expect." He added that decentralized, privately-issued digital currencies are not simply a means of payment, merely likewise tools that tin shift functions traditionally performed by the regime to the private sector. He said:

"Digital currencies at scale enhance non only concrete questions most money laundering, budgetary policy, and other topics, but too very abstract questions most self-government. Those engaged in digital currency markets should therefore wait that policymakers, in pursuing the public interest, will take a very hard look at these issues."

Muzinich extends Mnuchin'south warnings about Bitcoin

The fresh remarks from Muzinich, who causeless office as Deputy Secretarial assistant of the Treasury in tardily 2022, are a logical extension from some previous statements delivered past Treasury Secretarial assistant Steven Mnuchin.

In July 2022, Mnuchin criticized the major cryptocurrency Bitcoin (BTC), saying that it tin be used for coin laundering, and the authority will be preventing it from condign an "equivalent of Swiss-numbered bank accounts." Notably, Mnuchin declared that cash is not laundered like Bitcoin.

In mid-October, the Treasury agreed to the demand for an investigation into Facebook's forthcoming Libra stablecoin following a alphabetic character from Representative Emanuel Cleaver.