Congress has written to Facebook in a letter addressed to top officials of the social media giant including the CEO Mr. Mark Zuckerberg directing it to halt its proposed new digital currency Libra and its Wallet the Calibra. This move was dutifully made following the security, trading, privacy and monetary concerns which congress considers the Libra Project could have on the US economy and the global financial system which by extension will impact every lives on the planet.
Considering the huge user base which the social media giant has, it calls for grave concerns as it has been in the news for its lacklustre approach to user privacy and security which the Cambridge Analytical saga is clearly evident to.
Over the past year, Facebook has been working secretly on its cryptocurrency project dubbed the Globalcoin to the world at that time but it was until the Mid of June, 2019, Facebook formerly announced its new global financial cryptocurrency Libra which will run on its own blockchain. Haven recruited some corporate giants cutting across several sectors of the US economy such as Uber, Spotify, MasterCard, Paypal, Ebay, etc, Facebook appeared to be on the rise to actualize its global payment system which will see billions of people getting financial services in places around the world yet unbanked.
The announcement of the Libra project and the documentations created great reverberation across the global media space with many voicing their concerns over the new digital currency while others praising the initiative of the Facebook Libra. As these were going on, the price of cryptocurrencies notably Bitcoin saw an increase upto $13,000.
The concerns of the US congress over the Facebook Libra project points to the limited and/or obscure regulatory oversight which the government has over the digital currency space and this may just be the pin that pops the balloon thus creating legislative pieces which are focused on the blockchain and digital currency industry. This the US Congress made explicit in their letter
“if products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S and global financial stability“
The issue with the Libra Project also has to do with the need to protect investors and every day users of the Facebook platforms. Insurance forms a significant part of the financial system and as such, without adequate financial productive measures against account hacks and theft, if another Cambridge Analytical issue arises in the future, billions of dollars would be lost and this would spell an inescapable doom for millions of people in the US and world over.
If Facebook complies as it should, Congress will go on examining the various aspects of cryptocurrency. Once again, excitement will brew again for those against everything cryptocurrency and those in support of it as Congress congregate and we can only expect some interesting price actions.
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