Social media giant, Facebook has been asked by the US Democratic Congress to pause the development of its newly introduced global cryptocurrency project and ever since doubts relating to Libra’s success has filled the air around us.
- Regulatory response to Facebook’s Libra continues.
- Libra might evidently get strong opposition at the US Congressional level.
- However, Libra gets support from other countries which aim to be important financial centers
As recently reported by Coingape, Facebook Libra’s introduction has caused the giant social media company to answer many regulatory queries and now it seems that Facebook has too much to stop than continue. But as time goes on, Facebook will face much sterner tests to its cryptocurrency. This results from the evidence to prove that Libra is not just another payments option, It shows the possibility of replacing the Dollar as a global standard of value.
The basic thing that’s wrong with Libra
According to the June 27th Facebook’s briefing to congregational staffers, Libra employees either showed signs of being clueless or actually are. This, according to congregational staffers present at the briefing instigated a rapid call for a halt in operations regarding Libra’s developments.
Several Democratic Congress members responded, firing off a letter to Facebook. According to the report,
“It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy.”
Financial agencies believe that Facebook promises way too much than it can achieve. And in fact, the problems associated with building something as enormous as Libra have been left to the public to procure solutions. As Facebook continually showed poor stewardship of its new opportunity, it has no plans of technical development work relating to Libra.
The Simple Strategy
Facebook Libra’s whitepaper showed substantial innocence of financial knowledge and developmental strategies. For a company as large as Facebook, it is unreasonable to believe that the whitepaper is a piece of work showing incompetence, but merely an “intentionally half a backed” description subtly luring the financial world to improve it on their own by scrutinizing and presenting suggestions as to its improvements.
As the governments and financial regulators continue to resist Facebook’s Libra plans, the giant social media company would have to reveal plans that show considerable expressions for governmental concerns, which at the same time, might allow for the project’s continual developments.
Other Pressing Issues
Other issues raised by regulatory responses include using a multiplicity of currencies in the stead of a single recognizable one like the Swiss Franc or USD, and Facebook’s proposed retention of interests income generated from customer’s transactions and investments.
As expected of an investment company, Libra must be able to present explanations relating to governance and funds management for it achieve success in its path.
According to a Libra spokesperson on the customer tax issue,
“People will be responsible for filing their taxes in accordance with local laws in the jurisdictions in which they operate. We expect that many wallets and financial services built on the Libra Blockchain will provide people with tools to help manage this.”
In short, reporting and paying the tax obligation is the customer’s problem. Another strike against Libra’s future.
Staff writer at Coingape. Certified cryptocurrency expert and Blockchain journalist covering crypto market analysis and general Blockchain adoption and development.
You can follow me on Twitter at @ShonubiDare or reach out to me at dare[at]coingape.com