As you might have seen on Twitter yesterday evening – or read in social media wrap-ups this morning – President Donald Trump gave his first decree on Bitcoin and cryptocurrency. If you haven’t seen his thread of Tweets, we’ll cut to the punchline: He’s not in favor.
Kyle Asman, partner and co-founder of BX3 Capital, a business advisory firm that helps businesses get established with fundraising and professional services – and that got its start in the blockchain/cryptocurrency sector – had the following reactions to Trump’s comments on crypto:
- Facebook entering the space is a net positive. Because of a lack of buy-in from other corporates that don’t want the associated regulatory headaches, however, I don’t think Facebook will ultimately be successful in trying to launch Libra.
- The price of Bitcoin spiked on the back of Facebook’s announcement about Libra, as well as from the CBOE’s exit from trading Bitcoin futures.
- We are going to see a drop in the price of Bitcoin as a result of Trump's comments, and will likely see further drops through the rest of 2019 as regulators continue to beat up Facebook.
- The only way cryptocurrency is going to work in the US is if there is a coordinated lobbying campaign and clear regulation, such as the Token Taxonomy Act pending in Congress.
Off the back of news that Donald Trump has slammed bitcoin and cryptocurrencies, as well as Facebook's Libra, tweeting he is not a fan, we have compiled commentary from Danish business tycoon Lars Seier Christensen of Concordium, and Dave Hodgson, Director and Co-founder of NEM Ventures, who have provided their thoughts on Trump’s latest tweetstorm.
Lars Seier Christensen, Chairman of Concordium, the world’s first ID/KYC-ready business blockchain network, said:
“I tend to agree with the President on the aspect of cryptocurrencies in isolation. They are not the most important function of a blockchain and, in the case of Bitcoin or Libra, they must expect the same regulatory burdens as other issuers of currencies. If they cannot meet those requirements they will simply remain on the margins or be outlawed.
Blockchain aims to create a whole new infrastructure for introducing identification, trust, and execution guarantees into business areas where this does not exist today or is insufficient. This will contribute massively to economic growth in the long run, which I am sure a pro-business President like Trump will be in favor of.
Coins and tokens are just an accessory — potentially temporary and replaceable by fiat currencies when these are efficient enough — to the real purpose of blockchains and it is imperative that both politicians and regulators understand the difference between the two functions.”
Dave Hodgson, Director and Co-founder of NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem, said:
“Mr. Trump appears confused by what a currency is; a mechanism by which to represent and transfer value that two parties agree upon. The USD is fundamentally backed by trust that his government will keep using the mechanism, preserve its value, and the population will keep producing goods to support that. In my opinion, fiat currency is arguably based more on thin air than crypto. There are plenty of cases of fiat disappearing into thin air when that trust doesn’t hold - as exemplified in the cases of Zimbabwe, Argentina, Venezuela and Lehman Brothers to name a few. Most fiat is already digital and the supply is controlled by national interests; with trillions of dollars magically created since 2008, presumably from the US government "thin air tanks".
On the other hand, bitcoin has a finite, known maximum supply and release rate. It has scaled to the point that it is very difficult, expensive, and ultimately self-damaging to people seeking to control it, so in that way it doesn’t rely on trust. Trump does appear to ignore this before drawing conclusions, much like other policy decisions he makes to the detriment of his and the global fiat economy.
I believe that the Libra project, with its cross-border, cross-enterprise partnership, may threaten Mr. Trump’s sense of power and control. It represents private enterprise and, to a certain extent, citizens rejecting the model he holds dear as one of the elite few who enjoys its privileges. Although I do have concerns about Facebook’s morality in various regards, Libra is already having positive impacts by generating this type of debate at the national and international regulatory levels, and we have been asking for that for years.”