The Facebook Libra cryptocurrency has received a lot of attention within 24 hours after the launch of its whitepaper. Libra has also become a trending search term on Google with over 50,000 searches. Similarly, financial regulators, leaders of industries, cryptocurrency enthusiasts, and individuals across different nations have something to say about a digital currency that could potentially become a global currency.
Let’s start with regulators
Financial Regulators’ Comments About Facebook’s Libra
On June 18, 2019, the same day Libra’s whitepaper was launched, Maxine Waters, chairwoman of the House Financial Services Committee asked Facebook to halt the development of Libra until Congress and regulators have reviewed the virtual asset.
Waters in a statement said, Facebook has the data of billions of people and in the past, it had repeatedly disregarded the protection and careful use of this data. And now, with its announcement of an intended launch of a cryptocurrency, Facebook is continuing its unchecked expansion and even extending it into the lives of users of its platform.
Like Waters, Sherrod Brown, a top Democrat on the Senate Banking Committee made similar comments. Brown said Facebook is “too big” and “too powerful” as it is, and it has used the same power to exploit people’s data without protecting their privacy. “We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight,” he added.
Facebook is Expanding its Monopoly Which Creates More Concerns
Sen. Josh Hawley (R-MO), on the other hand, remarked that Facebook is expanding its monopoly through its plans to launch a cryptocurrency. Hawley outlined that he has several concerns when it comes to Facebook. For starters, he is very concerned about Facebook’s behavior, growing size, anti-competitive product, and frequent violations of privacy.
Hawley also pointed out the need for an investigation into the social media company. According to him:
“There needs to be an antitrust investigation. I hope one will go forward, but in the meantime, in the immediate future with this consent decree — if it’s just a fine of a few billion dollars, that’s a speeding ticket to Facebook. They need to get serious…Name Mark Zuckerberg. Name him, if he has in fact participated in violating consent decree as reports indicate. And let’s consider some tougher penalties, too.”
Libra Has a Potential to be a Huge Step Forward Towards Global Financial Infrastructure
While other comments pointed out Facebook’s disregard for privacy in the past, U.S. Congressman Darren Soto, Co-Chair of the Congressional Blockchain Caucus, however, noted the potentials Libra could have. Soto said the Libra blockchain project could a huge “step forward towards a more global and inclusive financial infrastructure.”
The congressman also outlined the potential Libra could have in increasing mobile and digital payments which could, in turn, be beneficial to the society and foster economic growth. Nonetheless, he was quick to note that it is unclear how the new technology will be regulated which makes it necessary for the Congress to protect consumers as well as the financial well being of investors while at the same time, encourage the innovation for digital currencies.
Cryptocurrency Community Makes Comments About Libra
A look at the tweets of leaders of companies in the cryptocurrency industry shows a division at this point. While some are applauding Facebook’s effort and cheering Libra on, others have chosen to point out that it isn’t a threat to Bitcoin.
In the case of the former, Erik Vorhees, co-founder of the Bitcoin company Coinapult in a tweet on June 18, 2019, said the cryptocurrency industry has come far because the biggest companies in the world are now launching cryptocurrencies.
Spencer Chen, VP of Global Marketing at BRD’s official headquarters opined that people shouldn’t really be badmouthing Facebook and Libra since it could kickstart the broad adoption blockchain technology is in dire need of.
Binance’s CEO Says Facebook Has the Opportunity to Reshape the Payment Industry
Changpeng Zhao (CZ), Binance’s CEO in a blog post said Facebook has the opportunity to reshape the payment industry and bring about the “un-dollarisation of the world.”
The CEO also said:
“Facebook’s initiative, with the Libra cryptocurrency at the center of the project, will have a significant impact on the financial industry and global economies from both a medium and long-term perspective…Backed by a basket of fiat currency-denominated assets in its initial release, Libra represents a first attempt at creating a world currency, on-chain or not, with everyday usage by billions of individuals and institutions across the globe.”
Binance’s CEO Says Libra Won’t Need KYC at the Cost of User Privacy
Nonetheless, the CEO had something contrary to say on Twitter. On June 18, 2019, CZ said Facebook knows your name, phone number, address, family, friends and as such, Libra does not require KYC. Furthermore, Facebook will now know who owns which wallet which helps in curbing money laundering. The latter comments can be tied to the belief that Libra does not promote anonymity as is the case of Bitcoin and other virtual assets.
Facebook Libra coin don’t need KYC. They have so much more data on the 2 billion people. Not just name, id, address, phone number. They know your family, friends, real-time/historic location, what you like… They know you more than yourself. And now your wallet too. Best AML!
— CZ Binance (@cz_binance) June 18, 2019
Generally, the cryptocurrency community expects that the launch of Libra will expose blockchain and cryptocurrency to a wide user base. It could finally help to put regulations in place for this asset class and accelerate the adoption of cryptocurrency technology.
