Facebook has made it known for a long time that it is interested in the cryptocurrency game and its Libra coin is just that. The move has made a lot of news and controversies. With the recent United States Congress having a hearing on the matter, it reflects why the lawmakers are against it.
Right before the hearing on Facebook was called, a draft of a bill surfacedthat was designed to restrict technology-oriented companies to move into the money sector. Aptly named Keep Big Tech Out of Finance, the bill’s contents are exactly as the names suggests,
A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System
The regulatory and law making authorities in the United States are hostile towards Facebook’s Libra and they are not hiding their intents. U.S. President Donald Trump has openly tweetedagainst Libra project and specifically has named Facebook,
If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International. We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!
While the President is known to be a traditionalist when it comes to the financial sector, his tweet does reflect the overall sentiment of the government and indeed, of other central banks around the world.
The hesitation or reluctance to allow Facebook launch its own cryptocurrency is not without reason. The social media giant is not famous for ethics and privacy. Only a few days before the hearing, The Wall Street Journal reportedthat the tech firm had reached a settlement with Federal Trade Commission over its past number of data breaches and leaks, such as the 2018 Cambridge Analytical scandal. The settlement is reported to be the highest ever – USD 5 billion, to be exact.
Senator Sherrod Brown from Ohio even said during the Banking Committee Hearingthat Facebook “broke journalism” and “helped incite a genocide” by not doing enough to take necessary measures to mitigate false news on the current Myanmar conflict. When the Senator asked David Marcus, the head of Calibra wallet, the official Libra’s, “Do you really think people should trust Facebook with their hard-earned money?” David said Facebook “will have no special privilege,”. Yet, before he could finish his sentence, the Senator cut in and said, “Mr. Marcus, you know better than that.”
That retort, sums up the trust of the United States government towards Facebook.
What now must be seen is how Facebook will react to all the resistance. It has to comply with the legislation, but will it completely stop the project or follow specific requirements that may arise is what will define the Libra.