Washington Politicians Criticize Facebook’s Cryptocurrency Plans

More politicians in Washington, D.C. are bashing cryptocurrencies and taking issue with Facebook’s (NASDAQ:FB) plans to start a digital currency of its own.

On Monday, Treasury Secretary Steven Mnuchin joined other politicians who’ve criticized Facebook’s proposed cryptocurrency, demonstrating the hurdles the company must overcome to ever make the digital currency a reality.

Speaking from the White House, Mnuchin said he has serious concerns about the national security implications of Facebook’s coin and other virtual currencies. He said the potential for money laundering and other illicit activities is high and vowed that the Treasury Department would crack down on law breakers.

"This is indeed a national security issue," Mnuchin told reporters. "We will not allow digital asset service providers to operate in the shadows."

Bitcoin pared an earlier decline after Mnuchin’s comments and finished trading Monday down 9.6% to $10,765.78 in New York.

Mnuchin’s comments follow U.S. President Donald Trump, who said on Twitter July 11 that he’s not a fan of Bitcoin and that cryptocurrencies are often used to facilitate "unlawful behavior."

Federal Reserve Chairman Jerome Powell also told lawmakers last week that he has "serious concerns’" about the token and cast doubt on Facebook’s timeline for launching it in 2020.

The opposition from both Republicans and Democrats might put fresh pressure on Facebook -- already under fire in Washington over scandals tied to data privacy -- to assess whether its cryptocurrency is worth it. The company faces a hearing on Tuesday before the Senate Banking Committee followed by another on Wednesday before the House Financial Services Committee.

In prepared remarks before the Senate panel, the top Facebook executive working on Libra, David Marcus, went further than the company has previously to try to assuage policy makers’ concerns that the coin could be a threat to the financial system.

Marcus said the token won’t launch until regulatory questions are fully addressed and he added that Facebook will get “appropriate approvals.” He said the coin isn’t intended to compete with countries’ sovereign currencies and won’t interfere with central banks on monetary policy.