U.S. Treasury Secretary Steven Mnuchin claimed that he was not currently comfortable with Facebook launching its Libra cryptocurrency platform. He said that he has “very serious concerns” about cryptocurrencies, including the one being developed by Facebook. That is one of the latest most obvious indications that Washington is preparing to exert its power over digital currencies.
In a briefing at the White House, Mnuchin said cryptocurrencies pose a national security threat because they can be used to fund illicit activities. He also said that the Trump administration was “not comfortable” with Facebook’s plans to begin their own digital payment system. He said:
“Libra could be misused by money launderers and terrorist financiers. This is indeed a national security issue. We will not allow digital asset service providers to operate in the shadows.”
He added that with regard to Facebook’s Libra, their overriding goal is to maintain the integrity of the financial system and protect it from abuse.
In response to a question on Bitcoin and other cryptocurrencies more broadly, Mnuchin said he did not know and would not speculate on how or why Bitcoin’s price might be trading at its current levels. He said:
“We’ll make sure the general public and investors understand what they’re investing in and whether it’s the SEC or other regulators there will be proper disclosures.”
This is obviously nothing new and it just follows president Trumps tweets made on June 12.
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
Mnuchin added that the administration had multiple meetings with regulators and representatives from Facebook, where the U.S. government expressed its concerns to the social media company. He wouldn’t publicly speculate how long it would take before the administration felt comfortable with the idea. Today, it’s expected that Libra’s CEO David Marcus stands in front of the Congress defending cryptocurrency and the company’s politics.
The truth is, however, that the most obvious reason why Mnuchin, Trump, Powell and the rest of the “crew” don’t want Bitcoin or any other cryptocurrency to succeed is the fact that it represents a direct threat to the U.S. dollar as the world reserve currency.
Believing that if people would massively turn to Bitcoin, that could destabilize the world markets, the federal government decided essentially to kill all cryptocurrencies by using government regulations.
Mnuchin was repeatedly saying that Facebook and other cryptocurrencies are going to have to meet all the banking regulations that every other financial instrument is required to comply with in the United States.
Thomas Lee, co-founder of Fundstrat said that the fact that Trump actually spoke of crypto is a big deal. According to Lee, Trump’s tweet will have the unintended effect of bringing more attention to Bitcoin. He noted that Trump’s disdain for Bitcoin, Facebook’s Libra and cryptocurrencies in general “makes the other 99% more aware” of Bitcoin and funny enough Trump’s signature phrase “Bad publicity is sometimes better than no publicity at all.”
On balance, it’s a positive.
– there are at most 1% of the world who really follow crypto (more like 0.1%) so 99% basically don’t care
– DJT stating he is not a fan makes the other 99% more aware.
– if 1% of those gets positive, just 2x market size. https://t.co/dz9QY3mjWP
— Thomas Lee (@fundstrat) July 13, 2019
The thing is – Bitcoin is getting its piece just from public attention. It doesn’t even matter if it’s FUD or bullish news. The proof – at the time of writing BTC was up more that 5% to $10,806.
Be it as it may, as Lee says: every PR is a good PR, including this one.
He also called Bitcoin recent pullback healthy saying:
It’s healthy to see #bitcoin pullback here.
As for the search traffic for bitcoin being low, I also think that is a good sign. It means the rise in bitcoin has not been accompanied by massive hype.
— Thomas Lee (@fundstrat) July 14, 2019