Facebook’s cryptocurrency launch seems to have a lot of hurdles to cross before the Libra coin becomes a reality. Last week, the U.S Senate Banking Committee slated a July hearing to question witnesses of the cryptocurrency initiative, stating that there’s a need to look into Facebook’s ‘risky new cryptocurrency’.
A few hours later, the French formed a task force of the Group of Seven (G7) nations to jointly look into the risks of Facebook’s unchecked expansion into the world dominated by Bitcoin trading. According to the International Monetary Fund (IMF), the G7 is a group of the wealthiest advanced economies. It is currently headed by France and includes Canada, Germany, Italy, Japan, the U.K., and the U.S.
The French Withhold their Ouis For Libra
A Friday Reuters report quoted French central bank governor, Francois Villeroy de Galhau, as saying that the crypto task force would be led by European Central Bank board member Benoit Coeure. The force would look into security concerns and consumer risks that the cryptocurrency poses, and existing regulations that check the use of digital currencies for money laundering, terrorist financing, and other crypto-crimes.
Villeroy debunked speculations that the task force’s moves were aimed at halting the potential usurper of banks in its tracks, stating that the country is “open to innovation” but strict with regulation.
The G7 alliance is not totally surprising, however. Earlier in the week, France’s finance minister, Bruno Le Maire, expressed concerns that Facebook’s cryptocurrency might grow to replace traditional currencies and stated that “it can’t and will not happen”. Le Maire’s concerns may have been based on a genuine need to ensure that Facebook’s cryptocurrency meets user safety and other legal regulations, but his doggedness in clipping all optimism of having Libra become a ‘sovereign currency’ begs an important question. Are the G7 task force genuinely working towards a safe premise of operation for a cryptocurrency, or are they cunningly delaying the growth of Facebook’s Libra because they fear that it will upset the traditional financial institution that they represent?
Will Facebook Scale these Hurdles Eventually?
That, curious reader, is the question on everyone’s mind- crypto-enthusiasts and industry outsiders alike. A lot of crypto watchers are optimistic about Facebook’s chances of standing up to the stifling regulations that are poised to hold back the revolutionary Libra coin. Others are unsure that Facebook’s management has figured out the real challenges that having a buy cryptocurrency sign would have on their global business.
16/ Libra, because it is *kinda* a cryptocurrency will *kinda* run up against many of the legal/regulatory challenges that real cryptos and crypto companies do. FB has the resources (and hopefully the balls) to fight some of the battles.
— Erik Voorhees (@ErikVoorhees) June 18, 2019
Can regulations make provisions to cover all the possible uses of the currency? Are there measures to protect national currencies of the countries that the stablecoin may penetrate? Will user freedom be absolute with the Libra coin? Can Facebook really stay off controlling the use and transactions according to their ‘community standards’? What guarantee is there that the fiat currencies will hold value when the public turns to Libra? The questions keep coming, and it seems that Facebook may not have answers to all of them.
It certainly does not help that Facebook has had data breach issues in the past, and it is not exactly a secret that the company sells user data to third parties for ad purposes. The social network company is not blind to these stumbling blocks in its pre-launch process. Despite confirming a 2020 release for its Libra app ‘Calibra’, Facebook COO Sheryl Sandberg has stated that the crypto’s launch will totally depend on regulatory approval.
So the government has issues with #Facebook & their use of data, breaches etc BUT everyone thought it was a good idea to give them the keys to the financial kingdom w/ #libracoin , THAT is scary, at least @jack started a new company in #Square away from #Twitter pic.twitter.com/dGtQF46wuR
— Louis Velazquez (@louisvelazquez) June 24, 2019
It remains to be seen where that leaves Libra, and the hope for a pure, decentralized globalcoin.