The US President Donald Trump sparked a new controversy with his tweet on cryptocurrencies. On Thursday, he wrote that he is not a fan of cryptocurrency and he criticized the proposal of Facebook to introduce Libra, a new crypto coin. Moreover, he added the name of Bitcoins to the list.
Donald Trump demanded the companies like Facebook to stop working on cryptocurrencies and work on products which are related to banking. He said the products must be regulated by a central authority just like any other bank. According to him, developing financial products is the primary function of a bank and not a tech company.
Bitcoin prices corrected sharply after the tweet of the president. “I am not a fan of cryptocurrency like Bitcoin because it does not have any significant value and the prices are highly volatile,” tweeted Donald Trump.
“If Facebook and other Tech Companies want to become Bank, must seek a banking charter, just like any other bank, both national and international,” he added.
Facebook in its white charter release announced the new cryptocurrency called Libra. The company site that we are working for a unified digital currency which will help in overseas payment. The company has targeted to launch Libra by 2020.
Currently, Facebook has partnered with 28 Global companies including PayPal, Master card, and uber regulate the new cryptocurrency. They also explained how the cryptocurrency would work. No bank has partnered with Facebook as of now.
Trump’s tweet comes after the chairman of federal reserve said the lawmakers that Facebook’s plan to make a digital currency, Libra, will not succeed unless the basic concerns like privacy, consumer protection and financial stability are address.
Powell said that he has formed the committee which is working closely with the central bank and other Global companies which have raised a concern about the plan of Facebook to launch a new global currency.
Facebook seems to be in trouble because the US committee of financial stability and risk is also going to form a committee to review the entire plan. Cryptocurrency is something new and a lot has to be understood before making any official statements.
Facebook, white house and the other departments denied commenting on any question. The federal reserve spokesperson also denied commenting.
Bitcoin, which was formed in 2008, remains unregulated. The cryptocurrency has been banned in various countries across the world citing the issues of high volatility and money laundering. It is expected that Facebook will also have to answer about money laundering and financial stability of the cryptocurrency.
JP Morgan Chase, the largest bank of the United States is also working on its own digital currency. It seems that the future is going to have multiple digital currencies and the companies are aware of their potential. However, lawmakers across the world are not yet comfortable with highly volatile currencies.