Nigel Green, the founder and CEO of deVere Group, spoke out after Donald Trump took to Twitter to say: “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.
“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”, he said.
The President’s tweets follow last month’s announcement by Facebook that it is to launch its own new digital currency to be called Libra. It is designed to be a low-volatility currency that will let its users buy things or send money to people with very low fees.
It will be backed by reserves managed by an independent organisation, called the Libra Association, made up of several leading tech firms and non-profits that give the token real-world value.
Nigel Green said: “President Trump is wrong and is placing himself on the wrong side of history on bitcoin and other cryptocurrencies. The blistering pace of the digitalisation of economies and our lives underscores that there will be a growing demand for digital, global, borderless money. Indeed, it is now almost universally regarded as the future of money.
“This is why most major financial institutions globally already have or are preparing to establish crypto desks. It is why more and more retail and institutional investors are piling into the market. And it is why tech giants, like Facebook, are getting involved. And you can bet that where Facebook follows, other tech companies will do the same.
“When everything from voting to music to books is already digital, dismissing digital currencies in a digital era is, frankly, bizarre and looks depressingly archaic.
“Does the President seriously think that traditional, fiat currencies are the way forward?”
Green said that he agreed that Facebook’s new Libra project should be scrutinised. He previously warned that it could end up killing traditional banks.
“But, being the social media monolith that it is, it is surely expecting this level of scrutiny. I would suggest that it is prepared for it, has the resources for it, and will welcome it, as it will make its cryptocurrency stronger.”
Green said: “The wider point here is regulation. Cryptocurrencies are already becoming mainstream. As such they should adhere to the same standards as the rest of the financial system. Regulation is necessary as it will provide further protection for the growing number of people using cryptocurrencies, the less likely it will be that criminals will use these digital payment methods, the less potential risk there will be for the disruption of global financial stability, and the more potential opportunities there will be for higher economic growth and activity in those countries which introduce it.
“And it is surely on its way, judging by the activities of regulators around the world.”
The deVere Group CEO added: “Standing on the sidelines, or worse looking backwards, on the issue of cryptocurrencies - which are redefining and reshaping the financial system - is a baffling approach for the leader of the world’s largest economy to take.”