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Social networking Giant, Facebook’s Libra arrived with a splash. It's been drifting into stormy waters since then. What Mark Zuckerberg might have seen as a simple way for his users to send and receive money online — government agencies and regulators have moved to a whole new level. Some have seen an evil plan to take over the world, or at least an attempt to overwhelm global finances.
Some US legislators have raised doubts about the Libra Regulation plan.
Some told #Facebook that they weren't really supposed to create currencies. Some have even begun drafting bills that would outlaw reserve-backed digital currencies such as #Libra (and probably Tether).
The response abroad was no more than sympathetic.
Previously, British Information Commissioner raised concerns about a corporation such as Facebook. We know FB has suffered many data leaks, adding financial information to the data about its users.
Commissioner Denham’s concerns join reservations expressed by regulators from Canada, Australia, and the European Union. The EU’s antitrust regulator has opened a probe.
Recent reports suggest that the pushback is affecting. Some of the 28 members of the Libra Association are said to be re-thinking their $10 million pledge to help establish the foundation that will govern Libra.
It’s likely too that Facebook is just the wrong company to manage digital currency. Facebook has enough power without adding global financial control too. But it’s also possible that the interest that Libra has generated from regulators is exactly what the cryptocurrency world needs.
But that lack of oversight has given money launderers, fraudsters, and market manipulators a free-rein. FinCEN, America’s Financial Crimes Enforcement Network, says that it now receives 1,500 reports of suspicious activity every month relating to cryptocurrency transactions.
Currency investors understand that the value of the dollar or the euro is a measure of the demand for those currencies in international business. The price of the dollar rises when more enterprises are making dollar transactions.
As long as there’s a feeling that someone who knows more than they know can gain an advantage in the market, they’ll stay away. And that’s even before they start to tackle the challenge of buying Bitcoin, holding it securely, and finding a seller willing to accept it when they make a purchase.
But if Bitcoin is ever to extend beyond speculators, early adopters, and true believers, it needs stability and transparency. Regulation has its problems, but it can bring predictability.
Holders of the currency can know that their assets will still be around in a year and won’t be devalued by a committee they don’t understand. They’ll be able to make transactions using a digital coin without being seen as money launderers or drug dealers. They’ll feel that the coin does have something behind it.
Take a thought that the regulation and oversight the project leaves behind could well create precisely the kind of infrastructure that other cryptocurrencies need.
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