The testimony of Mark Zuckerberg revealed some interesting takeaways. First, Zuckerberg seems to think that crypto is the future, and that the longer the U.S. waits to develop its own coin, the further it will fall behind. Second, many members of Congress still don’t trust crypto enough to push for mainstream status.
Zuckerberg: The U.S. Stands to Lose
In his speech to Congress, Zuckerberg commented that countries like China are well underway in creating national digital currencies. He says that while he wants America to join these ranks, this isn’t likely to happen if lawmakers continue getting in the way. Libra, he suggests, is simply a step forward in bringing the United States “up to speed” with other global regions.
While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months. Libra will be backed mostly by dollars, and I believe it will extend America’s financial leadership as well as our democratic values and oversight around the world. If America doesn’t innovate, our financial leadership is not guaranteed.
Despite Facebook’s shady history, it would likely serve U.S. regulators to heed Zuckerberg’s words. Recently, it was declared that China – for the first time in history – has more billionaires than the United States. Already, it seems as if the West’s financial status is waning, so perhaps engaging in similar projects might bring the nation back to its previous position of power.
Sadly, not all of Congress is taking the bait. Representative Brad Sherman – a democrat from California – was present during the hearing. He made his ideas of cryptocurrency clear. Not only does he not trust crypto, but he feels it’s likely to lead to waves of crime in the future.
Cryptocurrency either doesn’t work, in which case investors lose a lot of money, or it does achieve its objectives, and displaces the U.S. dollar as the sole reserve currency in the world. You’re going to be making powerful burglary tools and letting your business partners commit the burglary.
In addition, Sherman and several of his counterparts claimed that cryptocurrency could ultimately be used to fund terrorism and launder criminal money.
Reception Hasn’t Been Warm
Libra has not been welcomed into the cryptocurrency community. Since its introduction last June, the global platform has largely been viewed with skepticism. As it stands, less than three percent of Facebook users say they would ever consider using Libra in the future.
The testimony led to a massive bitcoin crash early this morning, though at press time, it appears bitcoin has spiked by over $100, so perhaps the fall was a temporary reaction to what has become a very controversial product of the crypto space and the currency can somehow heal itself in the coming weeks.