The tussle between the US administration and Bitcoin just intensified as the world’s most powerful lawmaker, the President of the United States, Donald Trump has spoken on cryptocurrencies for the first time, and the news is not pleasant for the industry. Trump has tweeted that he isn’t a fan of Bitcoin or other cryptos. He said that they are volatile and based on thin air.
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….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Though regulators and administrators of the world have mostly been against the cryptos, their criticism has had little effect on the industry at large. However, the same cannot be said about Trump’s criticism. Despite being one of the most controversial figures of modern times, the American President is still the most dominant and powerful personality in the world, and his comments have the potential to trigger market shifts.
Bitcoin has long been touted as the future of the global monetary system, and a currency which has the potential to replace the US Dollar in international trade. Cryptocurrencies pose serious threats to global dominance of Washington, both, economic and political. Also, Trump’s accusations against Bitcoin and crypto strengthen accusations made by regulators globally.
Trump also had a go on Facebook’s recently launched cryptocurrency, Libra, causing unrest among potential buyers. The US President stated,
“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.”
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Subjecting Libra to banking regulations might kill all the benefits which it boasts of. The core reasons mentioned in the White Paper include affordability, privacy, and global connectivity. If banking regulations are imposed on Libra, most of these features might be lost, making the entire ethos behind it to vanish away.
Trump also reiterated that the only real currency in the United States is the US Dollar, which is dependable, reliable, and stronger than ever. He further added that it is the most dominant currency in the world, and assured that it will remain this way. These remarks are quite bold and straightforward, though there might be hundreds of economics expert who would beg to differ on the USD’s health.
…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!
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Nonetheless, many would have seen Trump’s comments coming, sooner or later. Especially, after major monetary and financial regulators in the country, like Securities Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and the Treasury Department, intervention from the White House was long due.
However, the timing of the President’s intervention seems to be a bit odd, as just recently, the SEC had granted A+ Regulatory qualification to token offerings by Blockstack and YouNow. The move was viewed as a step forward in terms of regularizing crypto in the country.
Criticisms have intensified after the unveiling of Libra, simply because it’s backed by a social networking company like Facebook, which has a user base of over 2 billion people. Many US Congress Representatives have called for a complete ban on project Libra, and in a rare case, both the parties, Democrats and Republicans, have had the same opinion on cryptocurrencies. While some fear that Bitcoin and other altcoins could cause huge losses to novice investors as they did in 2018, others believe that they challenge the dominance of the USD.
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It is also a fact that America’s arch-rival, Russia, is venturing into the crypto space, with the aim of substituting USD in global trade. Growing political and economic tensions with Russia, China, Venezuela, Turkey, Iran, and India, might strengthen an alternate currency, which could most possibly be Bitcoin. However, if Donald Trump stays firm on his views, and takes steps to enforce them, crypto could soon be labeled ‘illegal,’ which would woo away general investors.
