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US president Donald Trump who is running for re-election in 2020, said on Thursday that he is “not a fan” of digital currencies. He also suggested Facebook get a banking charter if the company wants to launch its crypto coin Libra.
Trump’s Twitter lights up
President Trump said in a series of Twitter posts that he doesn’t stand with the idea of digital currencies. He noted that cryptocurrency is not real money while adding that such an unregulated crypto asset could lead to “unlawful behavior,” which may include drug trade.
Referring to Facebook’s plans to launch a digital currency of its own, 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.”
Facebook declined to comment on Trump’s posts. This is the biggest ever attack their Libra project which has been criticized by French finance minister Bruno Le Maire, Bank of England governor Mark Carney and Federal Reserve chair Jerome Powell.
He also talked about the price of Bitcoin and said that its value is very volatile and “based on thin air.” He summed up all criticisms against cryptocurrencies in his posts.
Bitcoin is not the US Dollar
Bitcoin remains volatile as it fluctuates quite frequently. In the last 24 hours, the price of the coin went up to $12,033.74 but quickly eroded to $11,142.79. A price movement like this in any other major currency could have signaled doom for the world economy. However, with Bitcoin, which is a nascent asset class, such volatility is only natural.
Trump said that the US Dollar is “dependable and reliable,” and it is the “only one real currency in the USA.” He then went on to trumpet the dominance of the US dollar in the world, saying that it is going to stay that way. Data from CoinDesk suggests that Trump’s criticism had virtually no effect on the digital currency market, and they continued with their usual market movements. Note that the price of Bitcoin has almost tripled year-to-date.
Meanwhile, Facebook could be concerned about the fate of their digital currency Libra. The company has to attend two back-to-back hearings in Washington regarding their coin next week. Trump’s criticism of their plans and a suggestion to get a banking charter may have a lasting impact on the company’s plan to launch a payments ecosystem.