Donald J. Trump tweeted Thursday that he is “not a fan” of cryptocurrencies, saying they were “not money” and referencing their price volatility relative to the dollar in his first public comments on crypto since becoming president of the United States.
Trump also criticized Facebook’s Libra cryptocurrency project in subsequent tweets, saying it “will have little standing or dependability” and suggesting U.S. regulators would subject the social media giant to regulation:
“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.”
(Facebook subsidiary Calibra, which is supposed to develop an open-source wallet for the cryptocurrency, has registered as a money services business with the Financial Crimes Enforcement Network.)
Trump has criticized Facebook in the past for its actions in banning right-wing figureheads, alongside other social media outlets. To date, however, he has not discussed Facebook’s cryptocurrency plans. The company first publicly released its white paper and supporting documentation for Libra last month.
The 45th president held a “social media summit” earlier on Thursday, addressing these concerns.
Regulators and lawmakers across the U.S. have taken notice of Libra, with both the U.S. Senate Banking Committee and the House Financial Services Committee scheduling hearings next week with Facebook’s blockchain lead David Marcus.
The Senate committee in particular has previously expressed concerns about Facebook’s track record with user data and privacy, writing an open letter to the company in May. Marcus responded to the letter earlier this week, telling the lawmakers that Facebook would not itself collect any personal financial credentials.
On Wednesday, Federal Reserve Chairman Jerome Powell also said that Libra should not be allowed to move forward unless and until the company addresses anti-money laundering and know-your-customer concerns, among other issues.
Financial stability is also a factor that Powell addressed, with lawmakers in both houses questioning the fact that Facebook has set up an entity in Switzerland affiliated with the project.
Facebook declined to comment on Trump’s comments.
In his tweets Thursday, Trump took aim at the potential for using cryptocurrencies in illegal activities, citing drug trafficking in particular.
“Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity,” he said.
In a final tweet, he added:
“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. 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!”
While Trump himself had yet to weigh in on cryptocurrencies prior to Thursday, his Treasury Secretary has been a strong proponent of greater cryptocurrency regulations.
Steven Mnuchin has been calling for greater crypto regulation since the beginning of 2018, calling on the G20 to take up the issue during an (at the time) upcoming meeting in March.
This year, the Financial Action Task Force published guidance for central banks, calling for stringent know-your-customer information collection practices. The U.S. Treasury Department held the FATF presidency until the end of June.
“We will not allow cryptocurrency to become the equivalent of secret numbered accounts [and] we will allow for proper use, but we will not tolerate the continued use for illicit activities,” Mnuchin said in remarks prior to the rules’ publication.
In contrast, acting White House Chief of Staff Mick Mulvaney has previously called for a more lenient regulatory framework, saying, “if we over-regulate and discourage people from entering the marketplace, that has bad consequences.”
Donald Trump image via Shutterstock
UPDATE (Jan. 9, 2021, 05:25 UTC): Updated links with archived versions after Twitter suspended Donald Trump’s Twitter account.