Comment | Trump is lying: He is not against cryptocurrency at all

On July 12, US President Trump said on his Twitter: I am not a fan of Bitcoin and other cryptocurrencies. They are not currencies, their value fluctuates greatly, and comes out of thin air.

Image source: Twitter screenshot

Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illicit activities. He also pointed out that “Facebook’s cryptocurrency Libra has little status or credibility.”

There is only one real currency in the United States, and it is stronger than ever. It is by far the most dominant currency in the world, and it will always remain that way. It is called the dollar.

His stance?

He believes that since he became the president of the United States, the price of cryptocurrencies has fluctuated too much relative to the U.S. dollar and does not have the characteristics of a circulating currency at all. He criticized Facebook's Libra encryption project, implying that U.S. regulators will regulate it, and yesterday's Fed statement was the first step. He represents the U.S. government and holds a large amount of U.S. dollars to control the U.S. and even the world economy.

Obviously, from any perspective, he will not disperse this power among the hundreds of partners of the Libra Association, nor will he admit that the US dollar assets in his hands are about to lose value.

“If Facebook and other companies want to become banks, they must seek new banking charters and become subject to all banking regulations, just like any other bank, whether national or international.”

The cryptocurrency project was originally created to prevent government regulation, but now Trump says that if the project continues to move forward, it needs to be subject to the constraints of traditional banks, which seems to be a bit like using his power to force a halt. In particular, the US central bank has also proposed that it can issue digital currency, but if the American people ask themselves, even if the US government issues digital currency that meets the anonymity requirements, is this the fundamental need of the people? There is no name on the current banknotes, which also meets the anonymity requirements.

His purpose?

The conflict between Trump and Facebook can be traced back to the issue of the American right wing before he ran for the US presidency. Facebook also used big data to place advertisements during Trump's election to induce people to vote.

Right now, the 2020 US election is just around the corner. Trump will certainly not let go of his opponents in order to retain his seat as US president. He will use the unrecognized ideology of cryptocurrency to curb Facebook's influence on the political landscape.

Everything is done to satisfy him with the election results, and all other words are just a show to the American people.

The US government's famous "PRISM" program has already shocked the world. Now it is using privacy and illegal mobile phone user data to make a fuss. This practice of allowing officials to set fires while not allowing ordinary people to light lamps is really a bit "unethical."

The U.S. Senate Banking Committee and the House Financial Services Committee will schedule hearings with Facebook’s blockchain chief David Marcus next week.

The blockchain executive also responded to questions from U.S. Senate committee members about privacy: Facebook will not collect any user’s personal financial credentials.

Are their doubts justified?

Yes. Remember yesterday, Jerome Powell, Chairman of the US Federal Reserve, said that Libra should not be allowed to move forward unless the company addresses issues such as anti-money laundering and know-your-customer issues.

Ordinary investors focus on returns, while the focus of financial economies is on system stability. Powell is simply concerned about the issue of financial stability.

Trump also proposed the use of cryptocurrencies in illegal activities, especially drug trafficking or money laundering. "Unregulated crypto assets can facilitate illegal behavior, including drug trafficking and other illegal activities," but in this regard, I believe that through the power of technology, it is possible to monitor asset anomalies, and I also believe that Facebook, an excellent data processing company, can do better.

Finally, regarding Trump's question about whether Bitcoin can be used as a payment currency due to its price fluctuations? Actually, it can be used. However, for the current market size, the price of Bitcoin is too low. If consumption is based on satoshis, there is still a long way to go. However, the current market price of Bitcoin fluctuates greatly, not because of the failure of the financial network, but because the current bubble in the real economy is too large. A deflationary currency facing an inflationary society will inevitably impact both.

Author: Lianxiang Finance