Governments and Banks Rail Against Facebook's Cryptocurrency Project
Just earlier this week Facebook's cryptocurrency project was announced, and it already seems to be meeting harsh resistance. As reported by Bloomberg, Facebook's Libra has been meet with resistance by European regulators and French Finance Minister Bruno Le Maire specifically. It appears that Libra's regulatory woes have just begun.
In addition to European regulation, it appears that Libra will face some resistance at home as well. The U.S. Congress's banking committee has scheduled a hearing on Facebook's cryptocurrency on July 16th, 2019. The focus will be on Libra's legal status and data privacy. It is likely that Mark Zuckerberg will be present and possibly speak at the hearing.
It appears that Facebook's Libra might be classified as a type of security, therefore illegal inside the United States. Seeing that Libra will be backed by multiple low volatility assets, such as bank deposits and government securities, it does seem to constitute a security. The US regulators will likely attempt to take harsh action against Libra.
This could potentially harm Facebook and their stock valuation if the hearing goes badly. Luckily for Zuckerberg, Facebook has a small army of lawyers and legal experts.
The Bottom Line
While many in the cryptocurrency community have some distaste for Libra and Facebook in general, they seem to misunderstand its importance. While it could cause wider adoption of Bitcoin and cryptocurrencies, the bigger deal is the legal ramifications. Should Facebook take on the SEC & Congress and win, this could change the legal status of cryptocurrencies in the US for the better.
BACK TO HOME
Written by Jonathan Ganor
Writer & cryptocurrency aficionado