Trump not a crypto-currency fan

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 12 Jul 2019
US president Donald Trump.
US president Donald Trump.

US president Donald Trump has slammed digital currencies such as Bitcoin and Facebook’s Libra.

In a series of tweets, Trump said: “I am not a fan of Bitcoin and other crypto-currencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behaviour, including drug trade and other illegal activity.

“Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. 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.

“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 comments come after social media doyen Facebook last month shared plans for Calibra, a newly-formed Facebook subsidiary, whose goal is to provide financial services that will let people access and participate in the Libra network.

Just hours after Facebook announced its new Libra crypto-currency project, US federal lawmakers issued warnings to the social media platform, requesting the project be put on ice until lawmakers have had a chance to review it.

According to reports, Facebook will face scrutiny from the US Senate Banking Committee on 16 July.

Facebook’s David Marcus on Tuesday responded to questions from the US Senate Banking Committee, saying the company needs governments, central banks and regulators involved to properly launch its Libra crypto-currency.

“We understand that big ideas take time, that policymakers and others are raising important questions, and that we can’t do this alone,” Marcus said in a letter to the committee.

“I want to give you my personal assurance that we are committed to taking the time to do this right.”

According to The Block, US Federal Reserve chairman Jerome Powell said on Wednesday that Facebook’s Libra project cannot “go forward” without first addressing concerns regarding money laundering, privacy and customer protection, among other issues.

In testimony before the US House of Representatives Financial Services Committee, Powell cautioned that regulators should be “patient and careful” when reviewing the Libra project, since no existing rules can fit crypto-currencies.

He also mentioned that the Federal Reserve has established a working group to monitor the project.