Facebook Cryptocurrency Libra Met Oppositions In Europe
Cryptocurrency Libra Met Oppositions In Europe
Facebook’s cryptocurrency plans were met with a strong opposition and critical response from politicians in both the United States and Europe.
The digital currency, Libra, is set to launch next year. Facebook also introduced the Libra Association, a consortium of 28 companies and nonprofits that will govern the digital currency.
Though Facebook says it won’t directly manage Libra after the launch, the company’s reach of 2.4 billion global users positions Libra to gain a larger mainstream audience than other cryptocurrencies have ever attracted.
If all goes to plan, Facebook thinks Libra could become a stable, digital currency used by people around the world, with the potential to fundamentally change financial and payment systems.
The company said it has and continues to work with regulators on Libra’s rollout, but that didn’t stop some lawmakers from voicing their concerns this week about privacy and security on the platform.
Regulators need to consider or implement stronger rules for cryptocurrencies. The US Senate banking committee scheduled a hearing on the Libra plans and data privacy concerns for July 16.
Challenges for regulation
House Financial Services Chairwoman Maxine Waters, a California Democrat, called on Facebook to halt development of Libra until legislators have a chance to evaluate the plans and “take action.”
Facebook is continuing its unchecked expansion and extending its reach into the lives of its users, Waters said in the statement.
“Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks and trading risks that are posed by cryptocurrencies.”
North Carolina Representative Patrick McHenry, the senior Republican on the Finance Committee, followed up by asking Waters to schedule a hearing on Libra. Cryptocurrency has been a largely unregulated market for about a decade.
The digital tokens present a quandary for US lawmakers because, unlike other products, it’s not clear which federal agency should regulate them, according to Columbia Business School professor and cryptocurrency expert R.A. Farrokhnia.
But pausing the development process, he said, is likely not realistic for Facebook. “Regulators want to make sure new products don’t pose a systematic risk, those are good causes,” Farrokhnia said.
“But the timelines for regulation have not kept in pace with the advancements in technology. “Facebook did not return a request for comment for this report.