President Trump had some choice words to share in regard to cryptocurrency and the Libra (Facebook) cryptocurrency in particular.
They were not flattering.
The President is “…not a fan…” and suggests that cryptocurrency will “…facilitate unlawful behavior, including drug trade and other illegal activity.”
His full quote was:
“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. Unregulated crypto-assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
He had a lot more to say, but that is the money line.
The comments were magnified by those of US Federal Reserve Chairman Jerome Powell who said that he felt that cryptocurrency “…raises serious concerns.” [Hey, if you were casting a movie on the Fed Reserve — sexy action thriller kind of movie with Charlize Theron as a central banker — is this guy not the perfect Fed Reserve Chairman?]
Powell’s comments, though less widely reported, contained substantial beef as he noted that the existing regulatory scheme does not “fit digital currencies” which he indicated would have to be addressed before Libra could go forward. He specifically called out Libra thusly,
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability.”
The President pointedly noted that if Facebook wanted to go forward with Libra they should get a bank charter. Your Big Red Car said the same thing some time ago.
The President’s and the Federal Reserve Chairman’s comments have had several interesting bits of fallout:
1. Cryptocurrency (and Libra) are getting the attention they want from on high. This is a good thing for cryptocurrency proponents. It doesn’t get Kik/Kin out of the soup, but it is progress.
2. Clearly, the sentiment of the powerful in government is concern about the dark side of cryptocurrency. I sense that crypto proponents don’t get the intensity of these concerns and are mentally treating them like a warning of side effects on an aspirin bottle.
3. The battle lines are being drawn with an interesting political twist. Obviously, the #HateTrump – #NeverTrump brethren are in an “enemy of my enemy is my friend” state of mind. Lots of far right Libertarian types are cryptocurrency advocates — well, at the least, favorably inclined.
4. Cryptocurrency will become very political. No Dem presidential candidate has come out strong for crypto — somebody will. Perhaps Andrew Yang’s promise of a Universal Basic Income $1000 per month payment will be made in Libra?
5. Bitcoin saw a small bounce — prediction by your Big Red Car: bitcoin will enjoy a short lived Trump Bump as the focus is on the battle lines being drawn. It will not last, but it will happen.
6. Presidents often get the blame or the credit for robust stock markets. Fairly so? You decide. But, the Federal Reserve clearly winked and said there would be an interest rate cut in the near future which has driven the stock markets to all time highs. All. Time. Highs.
Could this spill over into the cryptocurrency markets? Yes. Not for all, but for bitcoin? Hell, yes.
So, dear reader, there you have it. Cryptocurrency — bitcoin in the present, Libra in the future — is going presidential tweet mainstream. Huuuuuuuge progress.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car, y’all. Great weekend awaits for you. Get some.
