It has been almost a month since Facebook debuted its plans for a cryptocurrency called “Libra.” And now, the criticism is pouring in. Politicians on both sides of the aisle, as well as nonpartisan analysts, are questioning the viability of the new currency.
Late yesterday, President Trump took to Twitter to vocalize his criticism for crypto in general and Libra in particular. “I am not a fan of Bitcoin and other Cryptocurrencies,” said the Commander in Chief, “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.”
Trump went on to lambaste Facebook’s Libra in a connected post. “Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability.”
….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…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Democrats Pile On
But Republicans weren’t the only ones to criticize the President. In a rare display of bipartisanship, a group of Democrats on the House Financial Services Committee penned a letter to Facebook voicing similar concerns:
“We write to request that Facebook and its partners immediately agree to a moratorium on any movement forward on Libra,” the Democrats said. They then criticized “the scant information provided about the intent, roles, potential use, and security of… Libra and Calibra.”
That lack of information, according to the committee, “exposes the massive scale of the risks and the lack of clear regulatory protections. If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability.”
Additionally, Joseph E. Stiglitz, a Nobel laureate in economics and professor at Columbia University, strongly rebuked Facebook in an opinion piece at MarketWatch titled: “Every currency is based on trust, but only a fool would trust Facebook’s cryptocurrency.”
The Road Forward
For Facebook, the road forward begins with establishing any baseline of faith in their new currency. But facing criticism from Republicans, Democrats, and the community at large, that will be a tough hill to climb.