US President Donald Trump is wrong about Bitcoin and cryptocurrencies. But the space should be regulated, according to Nigel Green, Founder and CEO of deVere Group.
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
“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,” Green says.
“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.”
When everything from voting to music to books is already digital, dismissing digital currencies is, frankly, bizarre and looks depressingly archaic, Green argues. “Does the President seriously think that traditional, fiat currencies are the way forward?”
He does, however, agree with Trump that Facebook’s Libra project should be scrutinised. “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.”
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.”
Green concludes: “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.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.