At-A-Glance
- Following a contentious Senate hearing, the House Financial Services Committee pressed Facebook to halt the development of Libra.
- Japan’s government is pushing for a SWIFT-style system to manage cryptocurrency payments and combat money laundering.
- US President Donald Trump delivered a harsh critique of crypto over Twitter. Some suggest the Tweets mark a “psychological milestone.”
- Zimbabwe’s ban on foreign currency and rampant inflation has sparked demand for cryptocurrencies as investors scramble to preserve wealth.
Lawmakers Amp Up Pressure on Facebook to Halt Libra Cryptocurrency Development
CoinDesk
Following a contentious hearing with the Senate Banking Committee, the House Financial Services Committee pressed Facebook to halt the development of its Libra cryptocurrency. The committee’s chairwoman, Rep. Maxine Waters (D-Calif.), once again called for a moratorium while Congress enacts a legal framework. David Marcus, the CEO of Facebook’s subsidiary Calibra, said that Facebook would “take the time to get it right,” but did not commit to the moratorium. Rep. Carolyn Maloney (D-N.Y.) asked if Marcus would at least promise to do a small pilot test overseen by the Federal Reserve, but he repeated that Facebook would only commit to working with regulators.
Lawmakers also discussed a wide range of concerns, including whether Libra should be regulated as a ETF or a bank, and how the basket of backing fiat would guarantee stability. Subsequently, during questioning by a panel of experts, CFTC chairman Gary Gensler argued that Libra is a security and should be regulated as such. CoinShares Chief Strategy Officer Meltem Demirors later went on to articulate the difference between Bitcoin and Libra, likening Libra to a mutual fund with two classes of shares. Finally, Rep. Warren Davidson (R-Ohio) asked what differentiated bitcoin from low-quality knockoffs (which he referred to as “shitcoin.” Demirors explained that bitcoin is truly decentralized with a distributed infrastructure.
“Will you stop dancing around this question and commit here in this committee … to a moratorium until Congress enacts an appropriate legal framework to ensure that Libra and Calibra do what you claim it will do?” [asked Rep. Maxine Waters (D-Calif)… “I agree with you that this needs to be analyzed and understood before it can be launched … and this is my commitment to you. We will take the time to get this right,” David Marcus said.
[Rep. Alexandria Ocasio-Cortez (D-N.Y.)] questioned the governance of this aspiring global currency. “Were the members of the association democratically elected? Who picked them?” she asked Marcus… He replied that the membership is open, subject to certain requirements… “So we’re discussing a currency governed by private corporations,” Ocasio-Cortez went on. “Do you believe the currency is a public good? Do you believe Libra should be a public good?”… Marcus answered that “it’s not up to me to decide.”
“Libra is not a cryptocurrency … I want to distinguish and draw a very clear line,” [CoinShare’s SCO Meltem] Demirors said.
In a historic moment for bitcoin culture, Rep. Warren Davidson (R-Ohio) uttered the word “shitcoin,” almost certainly the first time a lawmaker has done so in the halls of Congress.
Japan reportedly pushes ‘international network for cryptocurrency payments’
Engadget
This week, governments across the globe are considering how to regulate cryptocurrency, ranging from bitcoin to Facebook’s Libra. Japan has typically been ahead of the curve in dealing with cryptocurrency — Bitcoin has been a legal form of payment there since 2017. Now Japan’s government hopes to create a SWIFT-style system to manage cryptocurrency payments and combat money laundering. Although few details are available at the moment about how the network would function, SWIFT is the network that banks use to securely route money across borders. The cryptocurrency community is not eager for more regulation and oversight, so some are wondering how regulators would implement such a system. For now, it remains an open conversation.
Reuters reports, based on anonymous sources, that [Japan’s] government is at the lead of an effort to create a SWIFT-style system.
The question of how regulators would insert such a system [still] needs to be answered. Even with the regulation Japan has now, just last week the Remixpoint exchange reported it lost $32 million worth of currency after being hacked. According to the report, the network is supposed to be implemented in the next few years” with cooperation from other countries.
Trump Tweeting About Bitcoin Is ‘Achievement Unlocked,’ Says Coinbase CEO
Coin Telegraph
This week US President Donald Trump delivered a harsh critique of cryptoover Twitter. Although some criticized the Tweets as “antiquated and irrelevant,” others suggested that they mark a “psychological milestone” for cryptocurrency. Despite their negative tone, Trump’s tweets sparked renewed optimism for Bitcoin across the crypto community. The general sentiment is that cryptocurrency has finally become a national topic of conversation, which bodes well for the future of digital assets. Some Bitcoiners thanked Trump for the free publicity, noting an uptick in Google search trends. Other commentators, including RT host Max Keiser, think that Trump’s negativity will come back to haunt thim. Keiser even suggestedthat the tweets could nullify his chances for reelection in 2020.
“Achievement unlocked! I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago. ‘First they ignore you, then they laugh at you, then they fight you, then you win.’ We just made it to step 3 y’all,” [Coinbase CEO Brian Armstrong] tweeted.
“Congratulations BTC community — the president of the United States feels we are worthy of a tweet now,” cryptocurrency entrepreneur, Simon Dixon, added. “Bitcoin has outperformed USD by 23,440,508% since it started being priced in USD.”
Another lesser-known cryptocurrency took the opportunity to capitalize on the buzz. TrumpCoin (TRUMP), an altcoin all but unknown since it appeared in March 2016, was up 28% Friday.
Zimbabwe’s Foreign Currency Ban Spurs Demand for Cryptocurrency
Voice of America
Zimbabwe has a ban on foreign currency, but its native currency is plagued by inflation, making it difficult for Zimbabweans to find stable economic footing. The situation has sparked a huge demand for cryptocurrencies like bitcoin, as investors scramble to preserve wealth.
Last year, Zimbabwean authorities banned banks from processing bitcoin, warning that cryptocurrency is open to hacking. However, the industry got a boost in June when authorities banned foreign currencies and reissued the Zimbabwe dollar. The currency had been abandoned in 2009 after inflation reached an estimated 500 billion percent. Last month alone, the new Zimbabwe dollar’s inflation rate rose to 175 percent. Businesses are looking to cryptocurrency to safeguard against hyperinflation. Still, some warn that cryptocurrency poses untenable risks. Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe says, “caution is key” when using virtual currencies.
“Bitcoin, I think, is the most safest cryptocurrency, and in terms of safety, you can have a large amount of money in equivalent to U.S. dollars or euros, having it on your person, moving it around even in seconds which is very beneficial rather than carrying a large bag of U.S. dollars on person” — Dennis Kadengu, Zimbabwean crypto investor
“We have seen a lot of people coming to us saying, ‘l want to move X amount of money’ or ‘l want to purchase a car in Japan,’ stuff like that, and we are accommodating them. So, it’s really a huge advantage to our side and l think also it will enhance our business in the long run.” — Confidence Nyirenda, director of Golix Crypto Exchange
“Until and unless we have that infrastructure physical, and also the regulatory infrastructure to be able to regulate the activities around digital currency, l think it will be difficult for us to embrace it and for that to have positive spin-off for the country.” — Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe
That’s the roundup for July 20th. Check in next week for the latest news of cryptocurrency innovation and regulation around the world!
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