LIBRA, Facebook’s proposed cryptocurrency, has Capitol Hill buzzing. Politicians from both sides of the aisle have voiced concerns. The President said it would have “little standing or dependability”; Maxine Waters called for a “moratorium” on its development for the time being; Federal Reserve Chairman Jerome Powell also shared “serious concerns.”
And now Treasury Secretary Steven Mnuchin has added his two tokens to the conversation, which triggered some market fluctuation.
What Did Mnuchin Say About LIBRA and Cryptocurrencies?
National security and money laundering appear to be Mnuchin’s biggest fears at this point. He explained: “This is indeed a national security issue. We will not allow digital asset service providers to operate in the shadows.”
Notice that he’s not calling for the outright abolition of digital currencies? He’s advocating for transparency and regulation.
In his remarks, Mnuchin also said that cryptocurrencies were “not money” and criticized the burgeoning market as “highly volatile and based on thin air.” The treasury secretary also expressed concerns about “the speculative nature of Bitcoin.” He capped his comments with an advisory to “be careful” when dabbling in digital currencies.
Interestingly, Mnuchin also praised Facebook for being “candid” with policymakers. He warned, however, that it would likely take lawmakers a while to get “comfortable” with the concept of LIBRA — and by extension other segment-specific digital tokens.
But again, he didn’t outright condemn them. Mnuchin left the door open. He also refused to comment whether he thought Bitcoin was trading high or low.
The Mnuchin Effect on Cryptocurrency Market
After Mnuchin commented, Bitcoin’s value went for a roller coaster ride. It soared and dipped, signaling that industry players are conflicted as to what to make of the Treasury Secretary’s current crypto position. One thing seems clear, though: lawmakers understand that digital currencies and blockchain technology are here to stay. The only question that now remains is how it will be regulated and legally treated.
Other Cryptocurrencies Are Also Lobbying Against LIBRA
Lawmakers aren’t the only LIBRA skeptics. Other cryptocurrencies are lobbying congressional staffers on the proposed token’s drawbacks and how it differs from their offerings.
Facebook’s lead LIBRA executive, David Marcus, is going above and beyond to quell any skepticism. According to reports, he’s been stressing to decision-makers that LIBRA will not threaten the financial system, nor compete with fiat currencies.
“The time between now and launch is designed to be an open process and subject to regulatory oversight and review. We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals,” Marcus recently surmised.
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