Trump blasts Bitcoin, Facebook’s Libra, Demands they Face Banking Regulations

REUTERS/Dado Ruvic

U.S. President Donald Trump on Thursday criticized Bitcoin, Facebook’s proposed Libra digital coin and other cryptocurrencies and demanded that companies seek a banking charter and make themselves subject to U.S. and global regulations if they wanted to “become a bank.”

“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,” Trump wrote on Twitter.

“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,” he added.

Facebook said last month it would launch its global cryptocurrency in 2020. Facebook and 28 partners, including Mastercard Inc, PayPal Holdings Inc, and Uber Technologies Inc; would form the Libra Association to govern the new coin. No banks are currently part of the group.

JPMorgan Chase & Co, the largest U.S. bank by assets, plans to launch its own digital coins.

Trump’s comments come one day after Federal Reserve Chairman Jerome Powell told lawmakers that Facebook’s plan to build a digital currency called Libra could not move forward unless it addressed concerns over privacy, money laundering, consumer protection and financial stability.

Powell said the Fed had established a working group to follow the project and was coordinating with other countries’ central banks, several of which have also expressed concern about Facebook’s digital currency project.

The U.S. Financial Stability Oversight Council, a panel of regulators that identifies risks to the financial system, is also expected to conduct a review.

Facebook, the White House and the Treasury Department did not immediately respond to requests for comment. A spokeswoman for the Federal Reserve declined to comment.

Bitcoin, the best-known digital coin, was created in 2008 as an alternative to currencies controlled by governments and banks, but crypto trading and digital currencies remain largely unsupervised. The market has also faced allegations of money laundering and terrorist financing.

Trump’s series of tweets on cryptocurrency also come on the heels of an event at the White House where the president criticized large technology companies that he said treated conservative voices unfairly.

The Internet Association, a trade group representing major tech firms like Facebook, Twitter and Google, said: “Internet companies are not biased against any political ideology, and conservative voices in particular have used social media to great effect.”

(Reporting by Makini Brice and Eric Beech; Editing by Lisa Shumaker and Peter Cooney)

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General Confusion
Member

Crypto-currencies will bring us back to our origins by confusing who controls our money. Originally, private banks made it real difficult to do business. When greed took over, as it always will, the government had to step in and create their own and eliminate all private bank currencies. Your government at work protecting you and making our economy more efficient. On the other hand, if everyone stops using our official currency in their purses and pockets and we only use debit cards, then we run the risk of government controlling the flow of money when they stop ABMs and store… Read more »

Ed
Member

Thanks, Screwtape, we’re really looking forward to the move. We are getting a pretty big chunk out in the Texas countryside, with more than enough room to shoot some rounds. My wife has been against me having any firearms until now, but she’s finally giving in now that the kids are older and we’re going to be quite a ways out from any immediate police response. I’ve got some friends who are already making suggestions on some hardware to get. It’s too bad that IJR is so broken when it comes to comments. I think two replies breaks it, or… Read more »

Screwtape
Member

Also to Ed, congratulations on your new home. May you and your family make many happy memories in it.

Screwtape
Member

Weird. I just got called spam and my log in was dumped. IJR again. In reply to Ed, I think the president misses the point. Crypto currencies are just another means of exchange, like barter. While I understand the government’s need to regulate it, my libertarian side considers this government overreach. I think what the government hates most about it is that they cannot track it (even less so than cash) and that it is frequently used for illicit/extra-legal transactions which usually involve criminal activities drugs, guns, etc.) From that stance I can understand why the gov.’t wants to regulate… Read more »

Otis
Member

The whole idea of crypto-currency is bizarre. Can I use Monopoly money to pay for items? If so, I’m gonna start carrying my ‘Get Out of Jail Free’ card in case I have any conflict with The Man.

WP Taylor
Member

It’s easy to see how Facebook could use Libra to enforce its political views and punish dissenters much as China’s social correctness score is used by the Chinese government. Especially after people start using Libras to buy physical items through Facebook.

Ed
Member

I’m in the process of buying a new home with the down payment coming from crypto currency that I’d mined years ago. It came from thin air (and electricity) and had been sitting in my digital wallet for almost a decade, but it’s real enough now after it turned into dollars. It was a bit tricky explaining where it came from, and I’m going to need to hire someone to do my taxes this year, but unlike the President, I’m certainly a fan.

Joe Cucchiara
Guest
Joe Cucchiara

Glad to see a Republican president see the financial chaos the cryptocurrency could cause and take a stand on Regulating these companies and requiring them to register as a Bank and operate within domestic and foreign banking regulations. Financial stability could be at stake.

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