Libra's So Terrifying It's Making Congress Suddenly Embrace Bitcoin

I never thought I’d see a high-ranking politician stand up and declare, “I like bitcoin.”

But that’s exactly what just happened. House Minority Leader Kevin McCarthy practically sung bitcoin’s praises this week.

How did we get here? How did we go from politicians ignoring and slamming bitcoin to embracing it? 

The reason is Facebook.

Lawmakers hate Facebook’s cryptocurrency Libra so much, bitcoin is actually starting to look good. As McCarthy explained, the decentralized blockchain's open model is preferable to Facebook’s vice grip:

“I want to see decentralization because Libra concerns me that they’re going to control the market.”

A light bulb moment is happening across Capitol Hill. As Congress grills Facebook over its cryptocurrency plans, politicians are learning the nuances of crypto. And they’re softening their stance on bitcoin.

“I like bitcoin” - why this statement matters

Bitcoin is a social movement as much as an economic and technical one. The way we talk about it matters. To hear a major politician say “I like bitcoin” is a glacial shift in social acceptance. 

There have been more of these verbal pivots from Washington, DC lately. Federal Reserve Chairman Jerome Powell gave a reasoned and nuanced summary of bitcoin last week:

“Really, almost no one uses bitcoin for payment, they use it more as an alternative to gold really. It’s a store of value; it’s a speculative store of value like gold.”

Although lawmakers still refer to bitcoin’s criminal uses, there’s a much more balanced tone to the conversation. Treasury Secretary Steven Mnuchin urged caution, but essentially green-lit BTC investing:

“I’d tell [investors] to be careful, okay. They should be clear why they’re investing in them…”

Congress hates Facebook, not crypto

It’s easy to watch this week’s brutal Congressional hearings and conclude that cryptocurrency is doomed. But that’s not the case.

All the attacks are pointed squarely at Facebook, not cryptocurrency. Sen. Sherrod Brown went straight for the jugular:

“Facebook is dangerous… Like a toddler who has gotten his hands on a book of matches.”

Notice he had little or nothing to say about the dangers of cryptocurrency itself. In fact, as CoinDesk noted, bitcoin was barely mentioned through the hearing. When it was mentioned, it was, again, nuanced and informed. 

Sen. Kyrsten Sinema (D-Ariz.) downplayed the criminal aspect of bitcoin, explaining that:

“Despite granting anonymity, cryptocurrencies aren’t the first choice for drug traffickers.”

Sen. Chris Van Hollen (D-Md.) clearly articulated that bitcoin is trustless, while the problem with Libra is that, “You do have to trust the Libra Association.”

Politicians are starting to get it.

This is thanks, in part, to crypto think tanks and pro-crypto politicians leading the way in Washington, DC. Wyoming Blockchain regulator Caitlin Long provided a testimony to the Senate ahead of the hearing. While crypto think-tank Coin Center is on the ground helping lawmakers navigate the intricacies of bitcoin and Libra.

"We just want to make sure that folks don't conflate [Libra and Bitcoin]. They're actually very, very different," Jerry Brito, CEO Coin Center said.

Lawmakers will choke Facebook, embrace bitcoin

This leads me to a bold theory: Washington, DC will choke Facebook’s cryptocurrency to death with regulation. I question whether it will even launch.

But politicians will continue to soften their stance on bitcoin. 

Ultimately, they may realize that the US government can be an active participant and beneficiary in bitcoin. The government can generate revenue by fostering blockchain innovation, luring crypto miners, holding BTC in its reserves, or even starting mining operations itself. Whether this is desirable is another question.

As politicians soften their stance, they may buy bitcoin themselves. Or BTC may find its way into their retirement portfolios. If that happens, their disposition towards the decentralized cryptocurrency will become even more favorable.

This will be a long process, but this week is one of the biggest turning points in bitcoin’s history.

Watch the Breaking Down of Facebook Libra Hearings by CCN

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

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About the author

Ben Brown
Ben Brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.

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