Facebook is on the wrong end of a political cycle which could weaken the standing of its cryptocurrency project Libra, believes Ryan Selkis of Messari.
The CEO said Libra is a “bonafide threat” to the US dollar because Facebook wonders about structuring the greenback with a basket of international currencies. The move, to the US government, is an effort to decouple a sovereign fiat currency from the influence of its central bank.
2/ Second clip @twobitidiot: Trump was hawkish in the past about inflation, looking at the bitcoin price seems as though he was right! Fed chairman Powell had it right that bitcoin isn't a mainstream currency, but it is competing as gold 2.0. Govt sees Libra as a bigger threat. pic.twitter.com/na2nUHOZaJ
— Pierre Rochard (@pierre_rochard) July 14, 2019
“It seems Libra should continue to draw most of the attention in ire,” Selkis told Bloomberg, adding that Facebook has just reached a $5 billion settlement with the Federal Trade Commission over privacy violations which makes the US government more doubtful about the firm’s foray into the financial world.
Bitcoin Lesser a Threat
The comments came a day after the US President Donald Trump criticized both Facebook Libra and Bitcoin in the same breath. The world’s most powerful politician tweeted on Thursday that he is not a big fan of either of the cryptocurrencies and that they should not expect special treatment from the US government when it comes to regulations and policymaking.
“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 said.
Trump held back from saying the same about bitcoin, which remains more a protocol than a brick-and-mortar company with an address in the US. His criticism of the cryptocurrency repeated what the bitcoin skeptics have been saying for years: it’s volatile and does not have an intrinsic value. The comments further failed to cause any trouble in the bitcoin market, as the cryptocurrency kept maintaining its grip on the prevailing bullish bias.
“With bitcoin, there is no CEO, there is no headquarters. You cant send a letter and call someone for a hearing,” said Anthony Pompliano, founder & partner with Morgan Creek Digital. “So I think the complete decentralized nature of the asset is what makes it compelling.”
— CNBC (@CNBC) July 12, 2019
That is the same Selkis attempted to explain, hinting that the US government’s hitlist included companies they actually hurt or submit into complying, such as Facebook. He said:
“Libra is a stable store of value that could truly be an alternative to the mass market overnight.”
Schiff: Fed will Come after Bitcoin
Gold bull Peter Schiff believes that Federal legislative bodies would eventually launch a crackdown against bitcoin. He said on Thursday:
“I wonder if Trump’s tweet about his not being a Bitcoin fan, and his specific reference to unlawful behavior, drug trade, and other illegal activity, is a precursor to a Federal legislative crackdown on Bitcoin and other cryptocurrencies? Ignore this risk at your peril!”