Facebook is one of the world's biggest social networking site and has millions of users. Earlier, this year Facebook introduced their own cryptocurrency "Libra" for their "WhatsApp" and "Messenger" users for making payments and money transfers. Since then every move related to their cryptocurrency "Libra" are in the global news. Unlike other cryptocurrencies, Libra seems to be centralized and controlled according to the whitepaper. As it appears , Facebook won’t fully control Libra, but get a vote in its governance with other founding members of the Libra Association, including Visa, Uber and others.
There are several debates and government's concerns regarding the regulation of Libra in top world economies, like how it will affect world's economy. The biggest issue of the government is that the authority of issuing a currency must belong to the government body and not to the big tech companies or firms. They are worried that this move of the companies such as Facebook might weaken the authority of government over monetary institutions, banking policies and might cause security problems.
US Senate Banking Committee questions
The US Senate Banking Committee questioned Facebook's top executive David Marcus. They questioned him about problems about how Libra could impact the world's monetary policy and how users data will be handled by the company. One of the ranking member of the Senate Banking Committee, Senator Brown, said that,
“Facebook is dangerous!.”
While democratic senator Sherrod Brown stated,
"Facebook has demonstrated through scandal after scandal that it doesn't deserve our trust." He added, "We'd be crazy to give them a chance to let them experiment with people's bank accounts."
David Marcus committed to data portability to provide users the facility of using own data to another application but wasn't very clear about the process. He however tried to convince that Calibra, the official wallet of Libra will be interoperable. Users can send money back and forth with other wallets. Embedding own wallet into a leading messaging apps could give the company a sizable advantage over banks.
Out of a handful of unanswered question, one of the interesting questions was, "Why Libra Association is considered a not-for-profit organization if it will pay out interest to members?
The G7 nation's concern
Other nation's authorities are also concerned with Libra. During a press conference, in an informal G7 meeting in Chantilly, North Paris, France, The French Finance Minister, Bruno Le Marie, who is also the current president of G7 top world economies stated,
"We cannot accept private companies issuing their currencies without democratic control."
He said that the G7 nation opposes this idea, that they must-have a serious regulation policy for Facebook's Libra, as then later it does not affect the global financial systems. However, the Presidency of French and other countries governors and ministers also consented that "stable coins and other various new products currently being developed projects with global and potentially systemic footprint such as Libra, raise regulatory and systemic concerns."
The other countries government officials such as Japan and Germany have also raised their concern regarding the regulation and the experiment of Libra.
The governor of the Bank of England, Mark Carney appeared more open towards it; saying he’s keeping an "open mind" but added that it should have to prove its "highest standards."
While Libra is working out on legalities
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Disclaimer: This is a guest post by Arushi Dubey. Content on this page is author's work and has not been created, verified or edited by EtherWorld.co. To share your guest article with us, please email at firstname.lastname@example.org.