There has been recent news of Mark Zuckerberg, the CEO one of the largest companies in world that he will be testifying against the congress over his Facebook’s digital cryptocurrency project “Libra” [1]. On October 23, he will be standing up against the House of Financial Services Committee to be examined over Libra’s cryptocurrency plans as the wide public and authorities around the world, mainly in US, UK and EU have expressed great concerns about Facebook’s Libra.
In Germany, the German government has expressed to be against supporting Facebook’s private digital currency project “Libra”, and will not be giving the green light for Facebook’s Libra digital currency in the European Union [2].
France is also on board together with Germany against Libra and are ready to block Facebook’s Libra. Both France and Germany have jointly stated that “no private entity can claim monetary power, which is inherent to the sovereignty of nations”. [3] Due to this the federal finance minister of Germany, Olaf Scholz is very critical of private cryptocurrency projects like Facebook’s Libra. On the other hand, though, he has voiced to be completely in support of digitizing the euro currency as e-euro would be beneficial to Europe’s financial system and integration into the world financial system as the world is becoming economically globalized [4].
In England, the Bank of England has stated that Libra must be subjected to meet its highest standards to gain approval to launch in Britain [5].
Aside from concerns of Facebook as a private entity claiming monetary power, regulators and data protection chiefs around the world has jointly expressed concerns over the privacy risks posed by Facebook’s Libra digital cryptocurrency project. As Facebook has shown to fail in to meet the regulator’s expectations in addressing secure information handling practices to protect user’s personal information and called Facebook to be more open their plans over Libra’s project to the public [6].
Libra’s mission is set out to be a global cryptocurrency built on blockchain to promote financial inclusion entrusted to be managed cryptographically by the Libra Association, with the vision to be digital, mobile, stable, fast, cheap and secure [7]. However, the network and the cryptocurrency in the project are not even complete yet [8] and Facebook is already under heavy intervention by regulators and controversy around the world. Facebook has been getting support for its Libra network from MasterCard, Visa, eBay, Uber, Lyft, Spotify and others. However, Paypal has already backed off from supporting Libra last week due to the heavy public controversy and regulatory concerns [9]. This may lead Facebook’s Mark Zuckerberg to be subjected to more congressional hearings from critics to understand in more detail why PayPal walked away from Libra [10]
Facebook’s plans to launch Libra’s first iteration of its own digital wallet for holding the Libra cryptocurrency in what is called the Calibra wallet and set to be launched in 2020. The service will be available in Messanger and Whatsapp, as well as in a standalone app [11]. We have yet to see what the future holds for Facebook’s Libra, however the controversy and heavy intervention by the regulators are not looking good for Mark Zuckerberg’s aspirational cryptocurrency payment project as the project might actually be taken for nations to create a their own version of a digital currency like e-euro and lead to a whole new and more integrated world’s financial system built upon digital technologies.
References:
[1] Feiner, L., & Wellons, M. C. (2019, October 9). Mark Zuckerberg to testify before Congress on Facebook’s libra cryptocurrency. Retrieved from https://www.cnbc.com/2019/10/09/facebook-ceo-mark-zuckerberg-to-testify-before-house-financial-services-committee-on-libra.html.
[2] Nasr, J. (2019, September 13). Germany against allowing Facebook’s Libra in Europe: Der Spiegel. Retrieved from https://www.reuters.com/article/us-facebook-cryptocurrency-germany/germany-against-allowing-facebooks-libra-in-europe-der-spiegel-idUSKCN1VY1SL.
[3] Frost, L. (2019, September 13). France and Germany agree to block Facebook’s Libra. Retrieved from https://www.reuters.com/article/us-facebook-cryptocurrency-france-german/france-and-germany-agree-to-block-facebooks-libra-idUSKCN1VY1XU.
[4] Foxley, W. (2019, October 7). German Finance Minister Supports Digital Euro, But ‘Very Critical’ of Libra. Retrieved from https://www.coindesk.com/german-finance-minister-supports-digital-euro-but-very-critical-of-libra.
[5] Partington, R. (2019, October 9). Facebook Libra must meet strict standards, warns Bank of England. Retrieved from https://www.theguardian.com/technology/2019/oct/09/facebook-libra-currency-bank-of-england.
[6] Palmer, D. (2019, August 6). Global Regulators Warn on Privacy Risks of Facebook’s Libra. Retrieved from https://www.coindesk.com/global-regulators-warn-on-privacy-risks-of-facebooks-libra.
[7] Libra: A New Global Currency. (n.d.). Retrieved from https://libra.org/en-US/.
[8] Ou, E. (2019, June 20). I Tried Using Facebook’s Libra Blockchain. It Didn’t Work. Retrieved from https://www.bloomberg.com/opinion/articles/2019-06-20/facebook-s-libra-cryptocurrency-isn-t-actually-supposed-to-work.
[9] Hern, A. (2019, October 7). PayPal pulls out of Facebook’s Libra cryptocurrency. Retrieved from https://www.theguardian.com/technology/2019/oct/07/paypal-pulls-out-facebook-libra-cryptocurrency.
[10] Maranz, F. (2019, October 8). PayPal’s Exit From Libra May Trigger Fresh Hearings, Cowen Says. Retrieved from https://www.bloomberg.com/news/articles/2019-10-08/paypal-s-exit-from-libra-may-trigger-fresh-hearings-cowen-says.
[11] Alvarez, E. (2019, June 19). Facebook’s Calibra cryptocurrency wallet launches in 2020. Retrieved from https://www.engadget.com/2019/06/18/facebook-calibra-libra-cryptocurrency-digital-wallet/?guce_referrer=aHR0cHM6Ly9lbi53aWtpcGVkaWEub3JnLw&guce_referrer_sig=AQAAAA2tVEFBt-nIlLZKken6tFqIoFNnlvRootaFDFw5hpHt8sjuMh1u0SgLxMIG2w3Kzs4t4FQC7x-Fq_h-RUspc-Pv8bBaajqPk8Nx-5JgYtE4BycuPE-TveWpZQPVfpcIUnoqdirqf8lnU6ShT-Uzu6Xksw7ieTUgQZsPIK8_33yv&guccounter=2.
