President Donald Trump joined a growing list of politicians that are questioning Facebook's entrance into the cryptocurrency market with Libra, its upcoming digital token.
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In a series of tweets on Twitter, President Trump revealed he's not a fan of Bitcoin and other cryptocurrencies, saying they aren't real money and have a value that is highly volatile and based on "thin air." The President argued the unregulated nature of the cryptocurrency market could enable illegal activities such as drug trade.
As for Facebook, Trump said Libra will have "little standing or dependability," and that 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." The president ended his missive saying there is only one real currency in the U.S. "Its 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 isn't the only one who has issues with Facebook's plan to launch its digital token Libra. Federal Reserve Head Jerome Powell, Bruno Le Maire, the French Finance Minister, and Mark Carney, the Bank of England Governor have all expressed criticism of Libra, according to reports.
Trump Isn't the Only One that Has a Problem With Libra
It's not clear what prompted Trump's bitcoin and Libra induced tweetstorm but it has been in the spotlight in recent weeks. In early July five Democrat lawmakers sent a letter to Facebook executives including Chief Executive Mark Zuckerberg, calling on the social media giant to halt production of Libra, which is slated to roll out in the first half of next year. The cryptocurrency will be operated by a nonprofit group dubbed the Libra Association but Facebook will still make money with its digital wallet that will store and exchange the tokens.
"We write to request that Facebook and its partners immediately agree to a moratorium on any movement forward on Libra- its proposed cryptocurrency and Calibra-its proposed digital wallet," the lawmakers led by Maxine Walters, chair of the House Financial Services Committee wrote. "It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar."
Is Facebook a Risk to Financial Stability?
Lawmakers argue Facebook was scant in details when publishing its white paper on Libra and that if products like Facebook's cryptocurrency is left unchecked it poses risks to U.S. and global financial stability. "Because Facebook is already in the hands of over a quarter of the world's population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action," wrote the Democrats. "Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail."