The US President tweeted that Facebook’s Libra should apply for a banking licence for its planned digital currency.
Donald Trump slammed Facebook’s Libra and Bitcoin saying they are “based on thin air” and aid “the drug trade”.
The US President (pictured) posted three tweets last night where he said digital currencies “have little standing or dependability”, adding that the big tech giant should seek a banking licence if it wanted to launch a currency.
He said: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
He added: “Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.
“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
The tweets come a day after US Federal Reserve chairman, Jerome Powell, told lawmakers in Congress that Facebook’s digital currency plans cannot move forward unless it addresses concerns over privacy, money laundering, consumer protection and financial stability.
Last month, the social media giant, led by chief executive Mark Zuckerberg, said it planned to introduce a new digital coin next year, that unlike other cryptocurrencies such as Bitcoin, will be backed by a basket of reserve currencies like Sterling and the US dollar in a bid to curtail wild fluctuations.
Facebook and its consortium partners said the currency will dramatically lower the costs of domestic and cross border payments, in a move it hopes will upend the delivery of financial services around the world.
The consortium currently consists of 28 financial, technology and not-for-profit bodies that range from Mastercard, Uber and Women’s World Banking.
In the hours after Trump’s tweets, the price of Bitcoin remained stable, before making gains of around 1 per cent on Friday morning at just over £9,305 a coin.
Bitcoin had traded below $6,000 for months but has been buoyed by Facebook’s plans to launch its own digital currency. In late 2017 it nearly reached $20,000 before a spectacular collapse last year.
Oanda senior market analyst Craig Erlam said: “I doubt this will be Trump's final intervention on the subject though so there'll be plenty more tests for the cryptocurrency space which is probably being helped by the fact that it's going through a good moment right now thanks to the Libra announcement.”
Facebook refused to comment.