ARLINGTON, Va.–Ahead of a Senate hearing on Facebook’s proposed Libra cryptocurrency, NAFCU sent a letter highlighting its concerns around the potential for terrorism financing and other criminal activity, as well as worries over privacy.
In its letter, NAFCU said it supports the Committee looking at regulatory concerns before the launch of a cryptocurrency should occur, including “compliance with Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations,” wrote NAFCU’s Associate Director of Legislative Affairs Max Virkus.
“Credit unions have long supported efforts to combat criminal activity in the financial system, and NAFCU has consistently recognized the importance of the Financial Crimes Enforcement Network (FinCEN) and BSA/AML regimes,” wrote Virkus. “These regulations and laws are essential to combatting terrorism financing and criminal activity and have only just begun to adapt to the realities of cryptocurrency-based exchange. Establishing a strong AML program does not happen overnight, and the culture of compliance that exists in an experienced financial institution, as opposed to any new player in the system, must not be overlooked.”
‘An Urgent Need’
Separately, when it comes to privacy, Virkus wrote, “Any institution offering a cryptocurrency would need to collect and store detailed information of their wallet holders. While depository institutions have for decades complied with a national standard on data security since the passage of the Gramm-Leach-Bliley Act, other entities who handle consumer financial data do not have such a national standard.
“There is an urgent need for a national data security standard for entities that collect and store consumers’ personal and financial information that are not already subject to the same stringent requirements as depository institutions,” Virkus added.
The House is holding its hearing on Facebook’s Libra today.