Cryptocurrency: President Trump blasts Bitcoin, Facebook's Libra, asks firms to face banking regulations

Criticising Bitcoin, Facebook's proposed Libra digital coin and other cryptocurrencies, US President Donald Trump on Thursday demanded that companies seek a banking charter and make themselves subject to the US and global regulations if they wanted to "become a bank." The US President wrote on Twitter, "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," adding "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." 

Trump`s series of tweets on cryptocurrency also come on the heels of an event at the White House where the president criticized large technology companies that he said treated conservative voices unfairly.

Earlier this week, Federal Reserve Chair Jerome Powell also raised "serious concern" over the upcoming digital coin Libra, while testifying before the House Financial Services Committee. Powell raised serious objections on Facebook cryptocurrency slated to arrive in 2020, adding "I just think it cannot go forward without there being broad satisfaction with the way the company has addressed money laundering" and other issues. 

The Federal Reserve Chair added: "Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability." 

US lawmakers have reportedly asked Facebook to cease all development of its Libra cryptocurrency, in a new letter sent to Facebook executives. Representative Maxine Waters, the chairwoman of the House Financial Services Committee, reportedly hinted at a move like this in June, shortly after the project was announced.

Last month, Facebook said it would launch its global cryptocurrency in 2020. Facebook and 28 partners, including Mastercard Inc, PayPal Holdings Inc and Uber Technologies Inc, would form the Libra Association to govern the new coin. No banks are currently part of the group. Notably, JPMorgan Chase & Co, the largest US bank by assets, plans to launch its own digital coins.

Facebook, the White House and the Treasury Department did not immediately respond to Reuters requests for comment. A spokeswoman for the Federal Reserve also declined to comment.

Bitcoin, the best-known digital coin, was created in 2008 as an alternative to currencies controlled by governments and banks, but crypto trading and digital currencies remain largely unsupervised. The market has also faced allegations of money laundering and terrorist financing.

Meanwhile, in Japan, another crypto hack took place. Japan`s Bitpoint is the latest victim to fall prey to hackers who reportedly stole USD 32 million in crypto assets from the licensed exchange.

According to CoinDesk, Bitpoint has halted all services including trading, deposit, and withdrawal of all crypto assets after it noticed the irregular withdrawal. It isn`t clear which type of assets were lost. However, Bitpoint`s parent company, Remixpoint Inc said that USD 23 million of the stolen assets belonged to its customers. 

(Inputs from Agencies)