Naturally, the crypto industry reacted swiftly to Mnuchin’s remarks that were made during a press conference held earlier today, and many analysts believe that it is a further validation of the nascent markets.
Following US President Donald Trump’s scathing remarks about Bitcoin and cryptocurrencies in general, the U.S. Treasury Secretary – Steven Mnuchin – is now placing crypto on the center stage of the US’ regulatory policy.
Mnuchin Claims That Crypto is a “National Security Issue”
Last week, the crypto industry was taken aback when President Trump went on a Twitter tirade in which he shared that he is “not a fan” of Bitcoin and other cryptocurrencies.
Although these comments certainly weren’t positive for the crypto markets, it was viewed as a validation of the cryptocurrency by many investors and analysts alike. Despite this, many analysts have also attributed the market’s recent downwards pressure to these comments, although this connection is purely speculative.
Shortly after these comments were made, Mnuchin further legitimized the issue by calling the lack of regulations surrounding cryptocurrencies as a “national security issue,” which likely signals that a massive federal regulatory crackdown looms on the horizon.
Industry Reacts to Possibility of Federal Regulatory Crackdown
Although Mnuchin’s comments weren’t necessarily a direct endorsement or opposition of cryptocurrencies, they are certainly emblematic of the fact that the nascent markets will likely face more stringent regulations in the months and years ahead.
Brad Garlinghouse, the CEO of Ripple, spoke about the comments in a recent thread of tweets, and noted that the crypto industry has come a long way from the days of the Silk Road online marketplace – a time at which Bitcoin was primarily used for illicit activities on the dark web.
“But as Mnuchin indicated, the entire crypto industry should not be painted with one broad brush – it has come a long way since the days of Silk Road. For the industry to succeed, we need to work with regulators and within policies. Full stop,” Garlinghouse explained.
Furthermore, Alex Krüger, a popular economist who focuses primarily on cryptocurrencies, explained that one positive thing about the recent comments made during the press conference is that it rules out a Bitcoin ban.
“On the positive side, a bitcoin ban seems out of the question. However, a US ban was unthinkable 5 days ago, before the Trump tweet. On the negative side, Libra (which is positive for $BTC) seems toast, while institutional interest in the asset class may diminish,” he explained.
Although at this moment it remains somewhat unclear as to what impact a deluge of fresh federal regulatory policies could have on the crypto markets, it is important to note that it could take many months, or even years, before any of these policies are actually cemented.