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Trump knocks Bitcoin, Facebook cryptocurrency: 'Not a fan'

The Hill logo The Hill 7/12/2019 Sylvan Lane and John Bowden
Wilbur Ross, Donald Trump are posing for a picture: Trump knocks Bitcoin, Facebook cryptocurrency: 'Not a fan' © Getty Images Trump knocks Bitcoin, Facebook cryptocurrency: 'Not a fan'

President Trump took aim at various cryptocurrencies, including Facebook's newly-announced Libra on Thursday as lawmakers and regulators express deep concern about the social media giant's financial services ambitions.

In a series of tweets, Trump said that he was "not a fan" of digital ledger-based currencies such as Bitcoin, insisting they could be easily used to conduct criminal transactions.

"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," the president tweeted Thursday evening.

Trump also blasted Facebook for its plan to launch a payments system next year, in which users exchange money through a proprietary cryptocurrency called Libra.

The Swiss non-profit set up to control Libra is not a bank, but Trump insisted that Facebook seek a formal federal approval to become one if it seeks to enter the financial services industry.

"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," Trump tweeted.

"We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable," Trump continued. "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!"

Trump tweeted his shot at Facebook shortly after the president convened a group of right-wing media figures to the White House for a so-called "social media summit." Trump touted at the event the White House's proposed "regulatory and legislative solutions" to stop supposed bias against conservatives on Facebook and other platforms.

"We have terrible bias, we have censorship like nobody has any understanding or nobody can believe," the president said Thursday.

While Trump's gripes with Facebook are not shared widely beyond the GOP, his skepticism of cryptocurrencies and Libra specifically reflects concerns of many lawmakers and regulators across the ideological spectrum.

Lawmakers insist that Facebook's massive reach and history of privacy breaches make its foray into financial services a dangerous gambit. The Democratic-controlled House Financial Services Committee and GOP-controlled Senate Banking Committee are set to grill Libra chief David Marcus in hearings next week.

And Federal Reserve Chairman Jerome Powell warned in congressional testimony Wednesday and Thursday that Libra poses "serious concerns" for the global economy.

"It cannot go forward without there being broad satisfaction with the way the company has addressed" privacy, money laundering, consumer protection and financial stability, Powell said Wednesday.

"All of those things will need to be addressed very thoroughly and carefully."

Powell added that regulators may label Libra as a systemically important financial institution. That designation would subject Libra to strict capital and liquidity standards the Fed applies to megabanks.

There is also wide bipartisan concern in Washington that cryptocurrencies are not adequately policed cryptocurrencies for illicit financing. Regulators have honed in on the surge of financial schemes based on cryptocurrencies, though many consumers exchange legitimate digital coins without incident.

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