The Facebook audiences of Libra in Congress are free entertainment

In a series of unusually consistent tweets, President Donald Trump spoke out against cryptocurrency, in general, and against Bitcoin's and Facebook's Libra cryptocurrency project, in particular. These tweets suggest that the congressional hearings scheduled for July 16 and 17 will be particularly hilarious.

It is predictable that the President of the United States of America, structurally, will always be an unscrupulous bitter – but that has not ceased libertarians and the far right to lose their shit on tweets. The structural thing may not be obvious, but: the president of the United States is ultimately the head of the dollar; the power of the dollar is an extension of state power. In the course of American history, the powers of the presidency actually expanded; the president of the state will probably not support the erosion of his own power. And bitcoin has explicitly undertaken to do it.

Bitcoin appeared partly as a response to the financial crisis; His first adopters were a group of anarchists, libertarians and others who aspired to a currency-based medium to express their hatred of government institutions. After all, it was about creating an alternative to fiduciary money and replicating the notions of gold bugs on the functioning of the currency. Cryptocurrency now has a serious audience among VCs in Silicon Valley.

Maybe that made Mark Zuckerberg jealous? It seems that it was Zuckerberg who pushed for Libra, the entry of society into the cryptocurrency space. I do not know exactly which answer was waiting for the people who worked on the Libra, but the reception was on the whole brutal.

Nobody trusts Facebook, a company that repeatedly neglects privacy concerns, does not present meaningless excuses, but rapes them again. Significantly, however, much of the cryptocurrency community hated Libra. They argued that it was not a cryptocurrency (plausible); that Libra was not based on a blockchain (probable); and that it violated the decentralized vision of cryptocurrency (absolutely). In a defensive blog post, Facebook's David Marcus begins by asking the question "Is it really a blockchain?", Then goes on to … does not answer the question of yes or no that he himself asked .

"Why does not there already exist a charter in place for the Association for Libra?", Is the next question, and Marcus says, in essence, that Facebook wants the other members to co-design the charter. Unfortunately for Marcus, I'm old enough to remember the "other partners" who pulled out of Facebook's free databases. Just like Free Basics, we are told that the mission is to help the poor; Also like Free Basics, the most likely entity to actually benefit is Facebook.

Jerry Brito, executive director of Coin Center, an organization dedicated to bitcoin policy, said Facebook had provided answers on how they envisioned regulation, but so far nothing has been made to regulate the Libra Association. In a Twitter feedhe reviews some possible regulatory structures. The absence of the charter, however, prevents us from saying with certainty how the Libra Association will be regulated.

Marcus's post contains other questions, but the answers to the first two are representative.

And then, the Twitter account of the President of the United States sank hilariously. "I am not a fan of Bitcoin and other Crypto – currencies, which are not money, and whose value is very volatile and based on tunes. Unregulated cryptographic assets can facilitate illicit behavior, including drug trafficking and other illegal activities …, "reads the first tweet. She continued in one second: "Similarly, the" virtual currency "of Facebook Libra will have little impact or reliability. If Facebook and other companies wish to become a bank, they must look for a new bank charter and be subject to all banking regulations, like other banks, both national and national. "

First of all: I am not convinced that the tweet comes from President Trump himself. It is too articulate, despite the fun capitalization. I do not believe for a moment that the president can set a cryptocurrency, explain what bitcoin is or even know what Libra (let alone its association) is supposed to be. If you are a political reporter and you are reading this: I have one hundred American dollars that I will pay you to ask President Trump to define these points. I'm not too proud to beg; Please ask Donald Trump about cryptocurrency.

According to US tax law, this tweet is correct: cryptocurrency is taxed as a commodity, just like gold. It is also true that bitcoin is very volatile, like many other crypto-currencies; if you like to speculate, it's a feature and not a bug. (If, however, you are trying to make payments, it means that you will have to pay capital gains tax on each transaction.) It is also true that cryptocurrency can facilitate illegal activities. (The same goes for the US dollar.) As for the "thin film": all the money, whether it is a cryptocurrency or something else, relies on trust, which is really a thin layer.

The second tweet indicates where is actually the political action, if the Twitter account of the President of the United States of America can be taken seriously. (Again, open question.) This seems to indicate something very different from what the SEC suggested for potential regulation last year: "Some platforms offer digital wallet services (to keep or store digital assets) or carry out transactions in digital assets that are securities. These services and other services offered by the platforms may result in other registration obligations under federal securities laws, including the registration of brokers, dealers and other registrants. transfer agents and clearing houses. "

Shortly after the introduction of Libra, Matt Stoller wrote a useful article on the legal obstacles to cryptocurrency, highlighting the one this tweet refers to: the barrier between banking and commerce. "Banking and payments are a special activity in which a bank has access to the intimate trade secrets of its customers," Stoller writes. "A travel agent told Congress in 1970 that he was opposed to the right of banks to enter his business:" Every time I deposit checks from my clients ", did he said, "I was supplying the banks with the names of my best clients. "

This political commitment, if it is serious, should make fans of cryptocurrency nervous. Bitcoin was specifically meant to offer an alternative to the banking sector, but the infrastructure of the portfolios in many ways resembles banks. And Facebook, presenting Libra as a potential alternative to the bank, has made this very obvious. (Facebook, for what it's worth, denied that Libra would work like a bank.) If every provider of a cryptocurrency wallet or a trading platform is suddenly regulated as a bank, friends, we are facing chaos. I do from time to time the Joker shot for hours.

You are not mistaken, the SEC is engulfed. Do you remember the project of linking Libra to a relatively stable asset basket, "low volatility assets, including bank deposits and government securities," denominated in several currencies? The SEC wonders if this makes Libra an exchange-traded fund, The Wall Street Journal reports. If this is the case, Libra will not start without their say. And if the United States does not allow Libra, will it be launched elsewhere? Facebook will not say.

All of these regulatory discussions are particularly hilarious if you remember the original culture and political commitments of cryptocurrency. The ideology of Bitcoin (and just about all cryptocurrency, even the perhaps not-crypto-real Libra) is that it's money for those who hate the government , especially government regulations. Trump's followers from 2016 were not just basic Republicans. Trump has excited the far right, the people who hate the government the most. These same people are those who tend to move towards bitcoin, a notoriously bad payment system that has finally evolved into the purest financial speculation that money can buy.

There will be two hearings on Libra and, given the awkward nature of its introduction so far, I'm expecting a joke. I am not convinced that anyone in Congress – with the exception perhaps of Elizabeth Warren – understands Libra, bitcoin or cryptocurrency from a theoretical or technical point of view. The questions are likely to be laughable and the answers will be worse.

But now that we have presidential tweets, I think the possibility of comedy is even higher. Here's what to do: If you're indebted to the far right, as some Republicans in Congress clearly are (Hi, Ted Cruz and Josh Hawley!), There's now the outer possibility of doing strange miracles. in favor of cryptocurrency. grant; Judging by all the shoes that were screaming up to now, this is going to be a clown convention.