Regardless of whether the cryptocurrency market makes the right moves toward legitimacy and acceptance within the capital markets, it seems there’s always a detractor ready to strike down the notion of digital currency replacing fiat currency. This time, it was Treasury Secretary Steve Mnuchin joining in on the crypto-bashing party.
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs and human trafficking,” said Mnuchin.
As far as Facebook’s efforts to launch their own cryptocurrency, Mnuchin wasn’t too high on the prospects of the social media giant being successful in that endeavor.
“They have a lot of work to do,” Mnuchin said.
After touching past the $12,000 mark the past week, leading digital currency Bitcoin fell below the $10,000 price level on Monday as U.S. President Donald Trump joined in the fray on bashing cryptocurrencies. In typical Trump fashion, he took to Twitter to voice his displeasure for digital currencies as a legitimate form of money.
I am not a fan of Bitcoin and other Cryptocurrencies, 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….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Bitcoin has been dubbed “digital gold” by cryptocurrency and capital markets alike, but the leading digital coin was deemed as an alternative to the precious metal by Federal Reserve Chairman Jerome Powell. Furthermore, Powell likened gold to Bitcoin as a speculative form of value.
Additionally, the Fed chair was quick to dismiss digital currency as an alternative form of payment.
“Almost no one uses bitcoin for payments, they use it more as an alternative to gold,” Powell said. “It’s a speculative store of value.”
Powell said after his testimony to Congress recently that cryptocurrencies, Facebook’s Libra project in particular, is a cause for concern.
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell said at a congressional committee Wednesday. “These are concerns that should be thoroughly and publicly addressed.”
The latest comments by the Fed chair come after French Finance Minister Bruno Le Maire said during a radio interview that Facebook’s latest foray into digital currencies “must not happen.”
Le Maire further said it was “out of the question” that Facebook’s cryptocurrency would eventually become a “sovereign currency.” The Group of Seven (G-7) collective that includes France, the U.K. and U.S. is looking to set up a forum that will delve deeper into the risks of digital currencies and their impact on the current financial system under fiat currency.
Cryptocurrencies are riding the wave of positive news stemming from social media giant Facebook unveiling its cryptocurrency payment plan on Tuesday. Dubbed “Project Libra,” the digital currency will feature partnerships with Visa and Mastercard.
The Facebook cryptocurrency news is setting the space abuzz with optimism as Bitcoin reached a high of $20,000 near the end of 2017 and fell over 70 percent since, but is climbing back to prominence again following this news. Despite pressure from governmental regulators for privacy issues, analysts are expecting this cryptocurrency offering will bolster Facebook’s profile.
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