A recent statement from US President Donald Trump has confirmed what many already knew concerning Trump’s views on cryptocurrencies and digital assets in general. In the President’s statement, the question of digital asset validity is brought to the fore as are the President’s wishes that crypto coin companies undergo the same regulation that government currencies are obliged to follow.
A Wary Trump
Trump views crypto as a breakaway from the global monetary system and states that digital assets should be brought into the same network of checks and balances traditional money is a part of. He goes further by criticizing the entire crypto system, saying that digital assets are not based on anything but air and are far too volatile to be trusted as money.
According to President Trump, all cryptocurrencies should be forced to seek out a banking charter in order to classify themselves as banks. Doing so would, of course, go against the very idea that fuels crypto, but the President seems unlikely to change his position anytime soon.
To drive his point home, the President said on Twitter that Facebook, Bitcoin, and all other crypto companies, should be subject to banking regulations worldwide, as well as within the US.
Can Trump Change the Course of the World?
In a world that seems increasingly pro-crypto, Trump’s condemnation of blockchain assets comes as a bit of a wakeup call for some. We have reported on how local and state governments have begun working crypto and blockchain into their future plans, as well as how positively crypto prices have been affected by those developments.
In fact, much of Bitcoin’s recent climb back to a promising position can be directly linked to the promise of the technology being accepted by the mainstream, thanks to the likes of Facebook’s new crypto project, among others.
Facebook Facing Hurdles
These latest comments from Trump may have the power to negate much of the newfound confidence that crypto is now enjoying. They also come in the shadow of a comment made by Federal Reserve Chairman, Jerome Powell, who said that Libra (Facebook’s new crypto project) will not be approved until a long list of red flags have been seen to.
Among those flags are questions related to money laundering, user privacy, stability, and much more. Powell has also said that Central banks from around the world also have to be a part of the discussion as to how Libra will be used since Facebook’s new blockchain project has the power to disrupt the monetary stability of countries around the world.
Facebook will likely launch Libra in 2020, but it is not Facebook alone that is behind the new gamechanger. PayPal, Uber, and Mastercard are also part of the planned crypto project. While there are no banks involved currently, Trump will push for a fifth partner if he gets his way.
An important distinction should be made here. Trump has lumped crypto coins like Bitcoin and others with Facebook’s Libra perhaps haphazardly. Facebook’s Libra is going to be a digital coin based on blockchain, but it will also have a value set to a reserve in federal currencies held by a partner of Facebook. That, in essence, makes Libra a kind of digital coin that is representative of legal tender (which is also similar in many ways to how government currencies are meant to be tied to reserved of gold, silver, and other valuables held by the treasury). Bitcoin, of course, is built around an entirely different philosophy, so we will have to wait and see how Trump’s criticisms affect crypto’s big picture over time.