The launch of Libra, the proprietary digital currency developed by the biggest and the most influential social media corporation of today, had stirred a lot of controversy and became the talk of the town for both the general public and the government officials throughout the world.
On one side of the debate are the representatives of the blockchain community who tend to express a modest optimism about Facebook’s intent to enter this space. They are convinced that the endorsement of this disruptive technology by the behemoth that is Facebook, would finally bring universal recognition of blockchain and the benefits it bears.
One the other side is the government and financial officials who began to voice their concern about the possibility of Libra undermining the national and global financial architecture and usurping the fledgling technology, just like it has done with the social media industry.
Many US politicians, like Maxine Waters, the Chair of the House Financial Committee, and Patrick McHenry, the Ranking Member of the same Committee, have lambasted Facebook publicly, demanding a moratorium on any further development of the digital money until after the Congress and the regulators get a full understanding of Facebook’s intentions and work out a set of necessary measures.
Obviously, the establishment couldn’t disregard the rallying cry of fellow politicians, so the official hearings before the Senate Banking Committee dedicated to Libra took place this week. The outcome of this hearing had a perceptible effect on the entire cryptocurrency market.
The hearing, which was dubbed “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations”, turned into a parade of criticism during which David Marcus, the head of Calibra, which is the blockchain department of Facebook, tried to somewhat weakly fend off the attacks launched at him from all sides. On that day, the Senators from both the Republican and the Democratic parties presented an oddly unified front in their effort to discredit the incipient digital currency.
Sherrod Brown, the Democratic Senator for Ohio, accused the corporation of being delusional for trying to lure users into trusting Facebook with their money after what the company had done to their personal data, referring to the massive data breach that happened in April.
Martha McSally, the Republican Senator for Arizona, followed up on that thought by saying that instead of initiating a new business model, Facebook should focus on the unresolved issues.
David Marcus tried to convince the Committee that his company doesn’t carry any mischievous plans that involve undermining the country’s financial institutions, but his apologetic stance appeared weak against the barrage of criticism.
The entire crypto world braced for this hearing since there have been many historic precedents when the price of Bitcoin and altcoins displayed radical moves to either side right after such events. It appears that their worst expectations have come true as there has been a significant drawdown on the day after the hearing throughout the entire crypto market.
The price of Bitcoin broke the $10K resistance level and continued to go even lower to $9.187, only to bounce back strongly over the time of six hours and get back to a $10 thousand line. Altcoins followed the same pattern, plunging down by 10+% but swiftly recuperating and going into the green, as of the time of writing. It is still unclear where the market will go next, but it is obvious that the battle between Libra and the regulators will continue to exert the impact on the entire crypto space.
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