The latest government figure to come out against Facebook’s Libra project is none other than US President Donald Trump, according to Tweets from the President’s personal Twitter account sent out on June 11. In a series of several messages, Trump criticized the project as well as other cryptocurrencies.
Trump’s main issues with Libra appears to be with the project’s potential to become a pseudo-bank, and with the uncertainty over how the cryptocurrency will maintain its value.
”Facebook Libra’s ‘virtual currency’ will have little standing or dependability”
“[…]Facebook Libra’s ‘virtual currency’ will have little standing or dependability,” he wrote. “If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National […] …and International.”
Trump went on, seemingly implying that the only currency anyone should be using in the United States is the dollar. “We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
Trump’s criticism of crypto was not limited to Libra. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” he wrote. “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….”
…and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!
— Donald J. Trump (@realDonaldTrump) July 12, 2019
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Trump’s apparent dislike of cryptocurrencies may have come as a surprise to some who may have theorized that the President had a positive attitude toward cryptocurrency in the past. While the President has never commented directly on cryptocurrencies before, some of his hand-picked government figures have shown support toward the cryptocurrency industry in the past.
Additionally, some US regulating bodies, including the SEC and CFTC, have shown a willingness to work with most cryptocurrency companies, rather than shutting them down or defaming them outright.
However, while the President’s statements were strong, they do not have any concrete legal implications–at least, not yet.
Negative Reactions to Libra Have Been Somewhat Common Among Regulators
Since Facebook published the whitepaper of its Libra cryptocurrency project in mid-June, the project has drawn quite a bit or regulatory backlash in the United States. Congresswoman Maxine Waters (D-CA) called for a moratorium on the project’s development until Congress has a better understanding of it; the United States Senate has scheduled a hearing on Libra for July 16th.
The project has drawn quite a bit of criticism and regulatory activity outside of the United States as well. Bank of England Governor Mark Carney said in a news conference yesterday that the project must be “rock solid” before its launch: “if you are a systemic payment system, you have to be on all the time. You can’t have teething issues, you can’t have people losing money out of their wallets,” he remarked.
French Finance Minister Bruno Le Maire also said in a speech to the French Senate earlier this week that “my determination to make sure that Facebook’s … Libra project does not become a sovereign currency that could compete with the currency of states is … absolute,”
“Because I will never accept that corporations could become private states.”
Indeed, Evercoin cryptocurrency exchange co-founder Miko Matsumura commented earlier this week at the Finance Magnates Barcelona Trading Conference that if Facebook’s currency is successfully launched, the only thing keeping it from becoming a sovereign nation is its lack of an army.
For now, however, “the US government can simply arrest the head of Libra or point guns at them but not vice versa,” he said.