Facebook Grilled, Political Grandstanding, US Senate Lack Of Education Around Digital Asset Technology

July 17, 2019 09:00 AM
Bitcoin Futures Back Below Key $10,000 Level
Political Grandstanding by US Senate Committee, Clueless About Crypto
Facebook Libra Grilled by US Lawmakers
Crytpo and Bitcoin Futures Story of Day

Crytpo and Bitcoin Futures Story of Day


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Yesterday, Facebook's David Marcus Was Grilled By The Senate Committee On Banking, Housing And Urban Affairs Around The Company's Cryptocurrency Plan - The Political Grandstanding And Lack Of Education Around Technology, Finance And Digital Assets Made For Painful Listening - Libra, In Less Than A Month, Has Become A Major Hot-Button Issue In DC - That Realization Has Likely Contributed To The Timing Of The Most Recent Correction In Crypto Broadly

The focus from lawmakers was overwhelmingly tied into recent mishaps Facebook has had with privacy and 'trust.' There were clear party lines drawn on the issue. Democrats, which have held a critical stance on Facebook since the 2016 election, further lambasted Marcus for prior errors at the company and were heavily skeptical that FB should also be trusted with financial data. The most aggressive questions came from Democratic Minority Ranking Member Sherrod Brown who managed to tie in Facebook's ambitions into risk of another financial crisis and outright asked, with all the negative focus on the project, 'what would it take' for Facebook to drop their interest in finance altogether. The Republican's played 'good cop' throughout the ordeal noting that they did not want to throw out a potentially beneficial innovation and were far more cordial in their line of questioning. There was little discovered on what we still view as the most pertinent questions around the mechanics of the platform, participant incentives etc... 

Takeaway: If there were any questions around whether Libra would become a partisan issue, yesterday demonstrated that it absolutely would. Further complicating the picture is that while the Republicans were the more welcoming side, the Republican President publicly disparaged the Libra project last week. The release of the Libra whitepaper was initially met with widespread excitement within crypto and coincided with an aggressive Bitcoin-led rally. The realization that this is going to be both a long regulatory and technical haul and that there remains a possibility that Libra never actually launches, has likely been a contributing factor to the pullback.

About the Author

FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets. You can subscribe to FRNT Financial Morning Note at https://www.frnt.io/morningnote