The Coinbase head honcho tore into the US government in a series of tweets around Libra and China’s proposed stablecoin.

Coinbase CEO Brian Armstrong assailed the US’ approach to Facebook’s Libra cryptocurrency in the light of the threat from China’s stablecoin.

“Now that China is looking into creating a stablecoin, I wonder if the U.S. will reconsider its ridiculous response to Libra, Armstrong tweeted. “There are many cryptocurrencies, and Libra is just one of them. But the way the U.S. government reacted, it’s like they almost want to be left behind.”

Coinbase CEO Brian Armstrong on US obstructionism

Armstrong also reminded the government that it could help in investment in technology and innovation. That would ensure the country remained “relevant over the long term.”

“But first, it needs to do no harm.”

Further, in the following tweet, Armstrong said: “The best first step is often just to stay out of the way. Innovation often looks counter-intuitive and disruptive.”

The US government vs. Facebook’s Libra

Regulatory approval for Facebook’s Libra stablecoin looks increasingly rocky. In a July press conference, Treasury Secretary Steven Mnuchin said the Treasury Department had “very serious concerns” that Libra could be misused by money launderers, terrorist financiers and other bad players.

Further, Libra also faced flak from Fed chief Jerome Powell. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection, and financial stability,” Powell said during his semi-annual testimony on monetary policy before the U.S. House of Representatives Financial Services Committee. He suggested that plans for Libra “cannot go forward” unless these concerns are solved.

Even POTUS tweeted negatively. “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,” tweeted President Donald Trump. “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….”

“….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability.”

[Related story: Post-Swiss Trip, Maxine Waters is Still Not Convinced on Facebook’s Libra]

Regulatory backlash scares off PayPal

Coinbase CEO Brian Armstrong added in one of his tweets that interested parties could manipulate the government. “The government is “prone to being co-opted by special interests/incumbents that will play on fears and try to block innovation here.”

Coincidentally, payments giant Paypal washed its hands of Libra and withdrew from the Libra Association. This was purportedly to focus on its core businesses. “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future,” the company said in a statement.

Moreover, according to reports, both Mastercard and Visa are also likely to opt-out of the Libra Association.

With friends like these…

Therefore, Libra is on the regulatory back foot, and there are concerns that it may never get off the ground at all. That would certainly boost the global prospects of a Chinese stablecoin.

[Related story:  Libra Association to Meet in Switzerland to Discuss Digital Assets: Make or Break?]