The United States government is concerned about the use of bitcoin for illicit activities.
“The first issue, and the most important issue, is to make sure that people can’t use bitcoin for illicit activities," said U.S. Treasury secretary Steven Mnuchin in an interview with Yahoo Finance. "So we want to make sure that you don’t have the dark web funded in bitcoins. And that’s something that is a concern of ours today."
Mnuchin said that he was discussing issues related to illegal transfer of funds using bitcoin with his counterparts in other countries. The cryptocurrency has minimal charges associated with international transfers, and its relatively anonymous nature has made it a favored mechanism to siphon money illegally.
While states have formulated regulations to monitor the activities of bitcoin exchanges, the federal government has held off from making pronouncements pertaining to regulations for the controversial cryptocurrency.
But that could change.
During the interview, Mnuchin said the government has formed working groups to look into the matter. But he didn’t commit to a timeline for an official government position.
Mnuchin is the second prominent voice to discuss bitcoin’s prospects in less than three days. Citigroup Inc. (CITI) CEO Michael Corbat recently spoke about it at a summit. “At the point that it becomes difficult to manage, governments will have something meaningful to say,” he said.
Bitcoin has had a stellar year so far. It is up by more than 600 percent since the start of 2017, as institutional investors and traders have made a beeline to cryptocurrencies for quick returns. (See also: If You Had Purchased $100 Worth Of Bitcoin In 2011.)
Numerous governments have instituted regulations or are in the process of putting them in place. Bitcoin’s underlying technology - blockchain - is also set to disrupt multiple industries, from music to finance to archaeology. (See also: How Indiana Jones Would Have Benefited From Blockchain.)
Regulation or an official position on bitcoin could further legitimize the currency and attract more investors and traders to it. For example, the cryptocurrency’s price spiked recently after CME announced bitcoin futures. (See also: CME To Launch Bitcoin Futures.)