Over the past two days, Federal Reserve chair Jerome Powell has informed members of both chambers of Congress that he has “many critical concerns” about Facebook’s Libra cryptocurrency. Those include issues associated with privacy and money laundering, in addition to the platform’s potential to destabilize monetary policy around the world, should it catch on with Facebook’s 2 billion customers. It appears the president of the US was tuning in.
Late Thursday, President Donald Trump unleashed a three-tweet squall declaring himself “not a fan of Bitcoin and other Cryptocurrencies,” and referring to using “unregulated digital assets” for “drug trade and other unlawful activities.” He included Libra in that category, saying the platform “will have little standing or dependability” and would fall prey to related dependability issues. He suggested Facebook would need to acquire a banking charter to proceed with its efforts. Trump concluded with a patriotic message about the international primacy of the US dollar, suggesting he’s not comfortable with Libra or other cryptocurrencies becoming rivals.
The tweets come as Facebook undergoes scrutiny for its plans from regulators in the US and overseas. Regulators—especially these at central banks like the Fed—are concerned that Libra will operate in a void outside existing frameworks for global monetary policy. They’re grappling with what rules would maintain a private financial network, overseeing its money supply, appropriately in check. David Marcus, the Facebook executive who will lead the corporate’s new financial services division, called Calibra, is scheduled to look in back-to-back hearings within the House and Senate next week.