One congressman who has been vocal against cryptocurrencies is Brad Sherman whose anti-bitcoin sentiment has been public since 2017. Sherman took a swipe at Bitcoin when Mark Zuckerberg, the Facebook CEO appeared before the US Congress on Wednesday October 23.
According to Sherman, cryptocurrencies such as the Bitcoin could reduce the influence of the USD if allowed to thrive. He said that the people pushing for the advancement of such digital assets are those who think that the dollar is not good enough for them.
These according to him are criminals such as drug lords, money launderers and tax evaders. Sherman made reference to a tweet by the US president, Donald Trump and a RAND report on the possibility of using cryptocurrencies by terrorists.
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….— Donald J. Trump (@realDonaldTrump) July 12, 2019
Zuckerberg who earlier in the hearing said that cryptocurrencies such as Libra would help in increasing financial inclusion also admitted that he is not certain that the Facebook cryptocurrency would be a success.
Sherman would have none of that and expressed his views saying,
“For the richest man in the world to come here and hide behind the poorest people in the world and say that’s who you’re really trying to help – you’re trying to help those for whom the dollar is not a good currency: drug dealers, terrorists, [and] tax evaders,”
….Similarly, 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…— Donald J. Trump (@realDonaldTrump) July 12, 2019
Sherman also said that a world in which cryptocurrencies are allowed to dominate would result in more people getting killed through drugs and other crimes.
This contradicts a 2015 report by Europol which said that most crimes are still funded with fiat such as USD and euro.
According to the report:
“While the world is looking with concern at the possible misuse of virtual currencies by criminals, this report may seem somewhat unusual in that it is not highlighting a new phenomenon or an emerging risk: money laundering and cash have been the stock of criminals for decades. However, this is precisely what makes the findings of this report of interest: in spite of the changing face of criminality, with significant threats now stemming from new technologies, money laundering schemes detected by law enforcement are still largely characterized by traditional techniques, in particular the use of cash.”
It is obvious that despite the reservations towards cryptocurrencies, criminals still favor using fiat such as the dollar in crimes because money can be a very effective mean of transfering value anonymously.
Zuckerberg highlighted that the United States needed to up its involvement with cryptocurrencies because other countries such as Russia and China have made inroads and remarkable progress in the field.
Sherman’s view however is that encouraging cryptocurrencies such as Bitcoin is a direct attack on the dollar dominance of the financial sector which would reduce America’s influence and ability to sanction countries.
“Cryptocurrency either doesn’t work, in which case investors lose a lot of money, or it does achieve its objectives perhaps and displaces the US dollar or interferes with the US dollar being virtually the sole reserve currency in the world,” he said.
What is obvious is that the Congress seems to have understood that the Facebook Libra, being a centralized cryptocurrency could be controlled. This is not the case with Bitcoin which is a decentralized digital asset. It is left to be seen what action the lawmakers would take towards the emerging technology.