Facebook recently announced their intention to delve into the nascent world of cryptocurrency with their own branded crypto called Libra. Currently, the gargantuan Bitcoin leads the cryptocurrency market with other smaller currencies at play, like Litecoin and Dogecoin. The cryptocurrency frenzy is extremely hot with Bitcoin initially selling at a few cents per coin but now sells at roughly eleven thousand US dollars per coin.





Keep in mind this is down from its all-time high of nearly twenty thousand dollars per coin. Clearly taking note of the blazing success of cryptocurrency, Facebook wants in on the action.





In June, the company announced its plans to release the coin in 2020. But the tech giant has received bitter opposition and fierce criticism from both Democrat and Republican politicians. Just look at comments from Trump and Ocasio-Cortez.





Republican President Donald Trump tweeted, “Facebook Libra’s ‘virtual currency’ will have little standing or dependability.” in response to the news.





And far-left democratic Representative Ocasio-Cortez from New York critically said “So we are discussing a currency controlled by an undemocratically selected coalition of largely massive corporations.” in a congressional hearing about the cryptocurrency.





These two politicians don’t agree on much. Yet, they agree that Facebook’s Libra isn’t good for the country. So in a political environment where compromise is almost unheard of: Why do both parties detest the mere idea of Facebook’s cryptocurrency?





Governments control two things: money and violence

Politicians are opposed to Facebook’s potential foray into cryptocurrency because it’s a giant infringement on the government’s power. Let me explain. The government derives its power from two primary sources: money and violence. Whoever has complete monopolistic control of these two resources in a territory, is effectively the government in that area. Sound confusing? Let me elaborate further.





The government completely controls what’s called legitimate violence. Any citizen within a country can commit violence on another citizen. But these crimes are severely punished.





Like murder. Murder is taken very seriously and while anyone can commit the act, the harsh punishment prevents people from doing so. Therefore, we consider citizen-on-citizen murder illegitimate violence because it’s punishable and therefore controlled.





Governments, on the other hand, are permitted to use violence on their citizens without fear of retribution. For instance, if the US government decides to murder an inmate in Texas via the death penalty. The government is not punished for this decision and receives no retaliation. Therefore the violence is considered legitimate.





The ability of a government to control violence is essential to its existence. So essential that a government is considered a failed state when they lose their ability to control violence. Countries like Syria and Yemen, where violence by rebels and the government currently goes unpunished, are modern examples of this principle.





Printing money has a lot of benefits

The second control that gives governments their power is the money, or more specifically the creation of money. All of the US dollars in existence were approved to enter circulation by the US government. And the United States holds exclusive rights to this privilege. It’s a privilege the US government (and other foreign governments) take very seriously. Especially, in a world where corporations continue to become more dominant because of their gargantuan revenues.





The lone ability to create money comes with a lot of power. For example, the US government can expand or contract the money supply. This may sound simple, but there are many powerful economic forces that change with expansion or contraction.





Like, inflation, deflation, stock market price volatility, corporate earnings, wage growth, lending habits, savings habits, borrowing habits, consumer confidence, interest rates, and a host of other economic processes. The United States government has the sole ability to alter all of them by simply raising or lowering the money supply.





Uncle Sam doesn’t want to share the benefits

Facebook’s Libra is a threat to this exclusivity. The United States remains the strongest economy in the world and the engine of global trade. If enough people decide to ditch the US dollar and buy, save, and borrow in Facebook’s cryptocurrency, then Facebook would wield a significant amount of power over the US economy.





Even the big bad Wall Street banks like Bank of America, CitiGroup, and AIG can’t independently create money separate from the United States government. Just like the Federal government, Facebook would have the ability to single-handedly alter those economic indicators. And that much economic power in the private sector would be unprecedented.





This is why Democrats and Republicans are staunchly opposed to Facebook’s crypto venture. They perceive it as a violation of the power of the US Government, and consequently an attack on their own power.





In order to protect the control and power of the United States, they feel the need to prevent Facebook from completing their currency project. Because the power of money creation would shift from the democratic republic to the corporate behemoths.



