World leaders have shown a strong aversion towards Libra, the new cryptocurrency being developed by Facebook, and sadly, this aversion isn’t lessening anytime soon.
Come On: Libra Ain’t All Bad…
Many of these leaders, such as France’s finance minister Bruno Le Maire and Bank of England governor Mark Carney, have explained that Facebook is on the verge of becoming a “sovereign nation” with the development of its new cryptocurrency. It is being suggested by these men – and others like them – that the development and distribution of money is what makes a country a reality, and thus, Facebook is about to become the world’s first “digital country.”
While addressing the French Senate, Le Maire spoke about Libra and commented:
My determination to make sure that Facebook’s… Libra project does not become a sovereign currency that could compete with the currency of states is… absolute, because I will never accept that corporations could become private states.
Carney has also warned against Libra, saying that it’s likely to face several regulatory “hurdles” once it makes an official debut in 2020. He explains:
It’s either successful or it isn’t. If it’s successful, it becomes systemic because it would involve a very large number of users. If you’re a systemic payment system… you must be on all the time. You can’t have teething issues, and you can’t have people losing money out of their wallets.
He further stated that Facebook is not positioned to “learn as it goes along.” He says that the company will need to know exactly what it’s doing before the currency is released, and that it must be subjected to the “strictest regulations” possible.
Even in the U.S., Libra is stirring quite a bit of controversy amongst U.S. lawmakers, with Federal Reserve chair Jerome H. Powell commenting:
Libra raises serious concerns regarding privacy, money laundering, consumer protection and financial stability.
Ever-defending Libra is David Marcus, the head of Facebook’s blockchain division and main developer of the cryptocurrency. He recently issued a statement mentioning to lawmakers that the company is working to make sure Libra is produced ethically and that the coin’s properties will ultimately make it invulnerable to issues like money laundering, terrorist funding, and other illicit activity.
Trying to Understand Libra’s Motives
We’re talking about something new, at scale in a very regulated industry, and if this is not done right, it could definitely present systemic risks no one wants… This is exactly why we believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing and more.
At press time, the G-7 is preparing a “task force” designed to better understand Libra along with other cryptocurrencies presently in development.
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