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Facebook’s cryptocurrency meets regulatory resistance from the first second

It’s only a day since Facebook announced its new cryptocurrency, Libra. Lawmakers in both Europe and the United States have already made critical statements against Facebook.

“Totally unacceptable”

Two days ago, the Cryptograph wrote about Facebook’s new cryptocurrency, and the coin is already receiving harsh criticism.

In Europe, among others, the French finance minister, Bruno Le Maire, was early on with his criticism of Libra. He is concerned that Libra will take over traditional currencies, and tells in a radio interview that it is completely out of the question that Libra will be allowed as an independent currency. Le Maire has requested a report on the project from the G7 central banks.

Also German Markus Ferber, who sits in the European Parliament, said yesterday that the new project to Facebook should be scrutinized. He warns that Facebook with its 2 billion users can become a so-called “shadow bank”. This is simple told a situation where organizations that are not regulated as banking systems perform banking-like activities. This is considered by the G20 group as a risk to financial stability in the world.

Ferber is clear that regulatory entities must take a closer look at Libra:

“Multinational corporations such as Facebook must not be allowed to operate in a regulatory nirvana when introducing virtual currencies,”

Will stop further development of the project

The same day as the news of Libra came, a hearing was requested from Patrick McHenry, representative of The House Financial Services Committee in the United States. The leader of the committee, Maxine Waters, responded immediately with a desire to stop the development of Facebook’s crypto currency.

Waters statement focuses on Facebook’s previous personal data abuse controversy, calling the new project a continuation of Facebook’s “unchecked expansion” into people’s lives. She writes:

“Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cyber security risks, and trading risks that are posed by cryptocurrencies. Given the company’s troubled past, requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.

Concerns started before the announcement

This is not the first example of concern about Facebook’s plans. Even before Libra was announced, an open letter was sent to Mark Zuckerberg from “The U.S. Committee on Banking, Housing and Urban Affairs. Here, questions are posed to the regulatory, but also to privacy around Facebook’s plans to create a digital payment system for its platform.

Mixed reactions on Twitter

On Twitter, several influential people have expressed their views on Libra the last couple of days. The well-known Changpeng Zhao, CEO and founder of Binance, tweeted the following:

Furthermore, Larry Cermak from The Block pointed out several uncertainties with Libra.

Others consider the whole project as a rapid driver for the adoption of bitcoin.