Regulators Lambasting Facebook's Libra

For about half a year or so, Facebook was subject to speculation and news mongering because of the mystery which shrouded the development of corporation’s proprietary cryptocurrency. Everyone kept guessing what would be the name of this cryptocurrency - Libra or GlobalCoin, which fiat currencies it would be pegged to, and whether or not this token even falls within the definition of a cryptocurrency since it was presumed to be heavily centralized and regulated.

Last week, the social media mogul has finally dispelled all doubt after having officially announced their intention to roll out the ‘global cryptocurrency’ titled Libra sometime next year. Obviously, this announcement has turned into the talk of the town, making the global crypto community along with each and every news outlet of the world buzz like an overcrowded beehive.

Price drops, criticism rises

Amazingly, this news bomb didn’t cause the expected spike in the price of Facebook’s stock. On the contrary, the market registered a slight decrease in the period from June 18 (the time of the emergence of the news) till June 19, from $188.47 to $187.48, though it has subsequently rebounded and gone up, reaching $193.17, as of writing. But these price shifts were nothing compared to the barrage of attacks from politicians and regulators, which they prefer to wrap up in such terms as “deep concern” and a “skeptical view”.

The Americans want more hearings with Zuckerberg

Naturally, the biggest concerns about Libra were voiced by the United States officials. The members of the Federal Trade Commission are already rubbing their hands gleefully, thinking of ways to impose restrictions on the future business practices involving Libra. Some members of the US Senate also offered their opinion on Facebook’s newest initiative.

Sherrod Brown, a Senator from Ohio who represents the Democratic Party, said in his interview to Bloomberg that the social networking behemoth is too influential of a company to allow it to have its own currency. He didn’t miss an opportunity to pour cold water on Donald Trump by saying that the current administration is cutting a lot of slack to huge corporations like Facebook, almost letting them run amok. He believes that should Libra be left without regulatory supervision, it will have a derogatory effect on the global financial system.

Maxine Waters, the chair of the House Financial Services Committee, declared her intention to initiate the hearings regarding the term of cryptocurrency operations and even asked Facebook executives to temporarily suspend the work on Libra until both sides will have reached a settlement on all outstanding issues.

What Europe had to say about Libra

The officials in Europe have also given their two cents on this matter with Mark Carney, the governor of the Bank of England, saying that the British financial institutions will approach Libra with great caution, and might even go as far as ban the cryptocurrency should they arrive at the conclusion that it is not safe enough.

Bruno Le Maire, the Minister of Finance of France, said that Libra constitutes a threat to national currencies. He intends to bring this issue up during the upcoming G7 Summit where the head of central banks will gather to discuss the acute financial problems. 

Author: Alex Paulson for Crypto-Rating.com