- Global privacy regulators, central bankers and finance ministers have expressed concerns about the proposed Libra cryptocurrency.
- Regulators concerned about massive existing Facebook network.
- The Libra Congressional hearings reveal U.S. concerns about its ability to protect the U.S. dollar as a vehicle for influencing and enforcing foreign policy.
The decision by Facebook to bring its cryptocurrency libra to billions of users around the world could put pressure on central bankers and regulators to take a stand. Two months ago, Facebook unveiled its vision for a global cryptocurrency called Libra, and since then, the venture has questioned by regulators, they may have reasons of their own.
Global privacy regulators, central bankers and finance ministers have expressed concerns about the proposed Libra cryptocurrency because it could drastically change or even undermine their jobs, at least theoretically. As a result, investors, crypto enthusiasts and regulators themselves argue that Libra has lifted the financial authorities ‘ stakes, forcing them to take digital currencies more seriously.
Regulatory Concerns over Libra
According to Zennon Kapron, founder and director of the consultancy firm Kapronasia, regulators are worried on several fronts — all linked to Libra’s potential to go mainstream. He also said that it’s behind Facebook, so Facebook is setting up the Calibra wallet they’ve been talking about — which would probably interface with WhatsApp, Facebook Messenger. They already have in their network a couple of billion people.
Given the overarching global reach of the platform, Facebook’s entry into the crypto space widely expected. Politicians and financial regulators naturally feel uncomfortable given the growing momentum created by cryptocurrencies and the radical opportunities they bring.
Naturally, central banks are concerned about losing monetary control over a far-reaching currency that can have repercussions at home and abroad. With Facebook holding over two billion user base across its multiple platforms, Congress is also concerned about the influence that a single company has on such a large population base.
US Congress’ Concern over Libra
The Libra Congressional hearings reveal U.S. concerns about its ability to protect the U.S. dollar as a vehicle for influencing and enforcing foreign policy, especially in terms of sanctions and trade.
This influence, however, does not derive from a fiat denomination [fiat is a government-issued national currency]; it derives from the fact that the U.S. has historically built a framework for economic development, innovation, and advancement. Paper fiat currency makes most of the anonymous transactions that tend to examine more straightforward.
While many Investors assume that Libra has received attention from regulators raises the claim that cryptocurrencies will soon become part of the financial system.
RBC analyst Zachary Schwartzman said that we find this dynamic fascinating and agree that internet investors will continue to monitor the transfer of developer talent and V.C. (venture capital) money into the Crypto sector, as well as new pipeline ventures.