Wow, everyone really hates Facebook. I mean really, really hates Facebook, with members of Congress right at the front of the line of folks waving pitchforks.
That's my main takeaway from the last two days of congressional testimony by Federal Reserve Chairman Jerome Powell, who's required to periodically meet with the House and Senate committees that have jurisdiction over the financial industry. Much of the time in both sessions was devoted to questions about how Congress should respond to Facebook's new cryptocurrency project, Libra.
Just to be clear, I'm no fan of Facebook myself. That's why I've closed my accounts on all their platforms -- including Instagram and WhatsApp -- and why I like to publish this old pic of Mark Zuckerberg any chance I get:
That said, these Washington people are taking it to a whole new level.
Powell told the blooper-prone House committee on Wednesday that he has "serious concerns" about Libra. In Senate testimony Thursday, he further elaborated, pointing that (a) Libra could be systemically important to the economy on Day One due to sheer scale of deployment on Facebook, and (b) the patchwork of U.S. regulatory agencies don't have clearly defined jurisdiction or rules regarding such crypto products.
As for the members of Congress, a certain realization sunk in for me listening to their questions: They all seem utterly convinced Libra will dominate the crypto markets. I don't think they know much about the status quo in those markets, really; this assumption seems just to stem from pure distrust of Facebook, plus the company's demonstrated hegemony in its core social networking business.
Cryptocurrency is a different ball of wax, though. In an odd way, I think they may be too focused on Libra over Bitcoin and other blockchain products in terms of potential impact. Unless I missed it, there wasn't a single question in either congressional hearing about this element of competition.
(Notably, President Trump was more broad-based in a Twitter rant against cryptocurrencies posted after the committee hearings ended, including mention of Bitcoin, Libra, and the market in general. But as with everything he says on Twitter, who knows what bearing that will have on actual federal policy? I'll pay more attention to what's being said at the grownups' table, thank you very much.)
Don't get me wrong: Libra is clearly a big deal. But it's not necessarily clear to me that it will ever be as economically important as Bitcoin or even Ethereum, if the latter were to realize its aspirations to become a computing platform that runs large parts of the global economy.
Some numbers that provide helpful perspective here: As of today, Bitcoin's market cap is $205 billion. Total global cryptoassets, including all tokens tracked by CoinMarketCap, is $314 billion. It's by no means a given that even the mighty Facebook can easily dominate or upend the pecking order of such a market.
I'd even venture to predict that one year after Libra's launch, Bitcoin will still be the largest single cryptoasset by market cap. A very measurable benchmark there. Feel free to check back with me on Twitter to call me an idiot -- or a genius -- whenever the date arrives. 😉
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