Why is Trump so opposed to cryptocurrencies?
- Trump blasted cryptocurrencies yesterday, saying they are not real money
- He also criticised Facebook’s Libra crypto project
- Other global finance leaders have also opposed the budding currencies
Yesterday, US President Donald Trump criticised cryptocurrencies, singling out Facebook Inc.’s Libra project. He said that the US dollar should be the only real currency in the United States given its stability and reliability compared to the highly volatile cryptocurrencies.
Trump expressed his sentiments through a series of tweets. He also voiced his opposition to Facebook’s Libra project, saying that the social media giant should get a banking charter before launching its crypto project and should be bound by the same regulations that other banks have to follow.
The president’s comments echo those of some regulators, who have raised concerns about the volatility associated with cryptocurrencies given bitcoin’s (BTC) latest price swings that have seen it oscillate within wide ranges.
Many critics are saying that if fiat currencies experienced similar price swings, many consumers would rush to the banks to withdraw their deposits, triggering a massive bank run. The same is not true of cryptocurrencies, which have a lot of leeway when it comes to how consumers react to their highly volatile price swings.
Trump joins many other leaders, including Fed chair Jerome Powell, French finance minister Bruno Le Maire, and Bank of England governor Mark Carney, who have all publicly voiced their concerns about cryptocurrencies, especially Facebook’s Libra crypto project.
According to Trump, cryptocurrencies are not money because they are highly volatile and their value isn’t based on anything solid, which is a criticism that cryptocurrencies have faced since the invention of the first cryptocurrency, bitcoin.
This is not the first time that new technology has been vilified by the incumbents in a particular industry. Similar criticisms were levied against the internet when it first became available to the general public, but the good technologies usually outlast their critics.
For most crypto investors, there is little doubt in their minds that bitcoin and other digital assets are here to stay and that no government can shut down the blockchain technology that is the backbone of every crypto asset.
Some of the major financial institutions have realised that cryptos are not going anywhere and are working on their own blockchain networks because they know that ignoring the technology is likely to result in their competitors adopting it and dominating the market.
There is no single invention that is now an integral part of modern society that was not opposed in its early stages before proving that it was indeed a better option than the existing technologies.
It’s interesting to note that the companies that bred horses and those that made horse carriages were extremely opposed to Henry Ford’s invention of the car. Eventually, the car took over the transportation industry, making horse transport nearly extinct.
Cryptocurrencies have been around for several years now, and more people are finally paying attention to these alternative assets and currencies. Although they may not entirely replace fiat currencies, they will definitely reshape the global financial industry.