It would appear Facebook’s venture into the world of digital money may hit a roadblock before it is even launched. The Libra project, which is not a cryptocurrency by any stretch of the imagination, has not received official approval by the US Congress. As such, a thorough review seems to be in order, as that could highlight some potential drawbacks which remain hidden right now.
Libra is in the hot Seat
Not too many people should be surprised to learn Facebook’s digital money project is creating quite a stir. The Libra currency, while often falsely labeled as a cryptocurrency, will allow users all over the world to make payments online. More importantly, this currency will be supported throughout all of Facebook’s applications and WhatsApp. Users will not need a bank account or payment card to make use of this currency either, which makes it very appealing.
However, the United States is not a region where financial freedom is appreciated or easy to come by. In fact, it would appear the current regulations indicate any new financial project needs to be scrutinized prior to launching. Facebook has jumped the gun in that regard, as it simply announced the currency regardless of government approval. That may come to haunt the company now, as Libra is on everyone’s radar.
According to chairwomen of the House Financial Services Committee Maxine Waters, now is not the time to launch a new form of money without approval by the US Congress. That makes a lot of sense, as the US government has effectively taken a harsh stance on securities. Which category Libra will fall in exactly, remains to be determined at this time. Since no approval was requested, it is not impossible to expect Congress to shut this project down prior to its launch.
It has to be said how Facebook does not have the best of reputations, both domestically and abroad. Combined with the regulatory uncertainty regarding Libra and other innovative forms of money, the future looks rather troublesome All of the privacy kerfuffles Facebook has gotten caught up in over the years cast a dark shadow over this new currency as a whole. The company has shown numerous times they are not too interested in putting consumer privacy front and center.
Interestingly enough, it would appear Facebook is more than willing to talk things over with policymakers. Considering how the company will offer a digital wallet solution to Libra users, there are still a fair few questions as to how much control the user will have. This also further confirms any privacy-related concerns need to be clarified prior to launching this new project. There is still a fair bit of work to be done in this regard.
As such, it remains to be seen how things will pan out. Considering how Libra is supposed to launch relatively soon, time could very well be of the essence. It is unclear if this “request” by the chairwomen will cause any delays in terms of launching the project, but it is a possibility that one has to keep in mind at all times. That doesn’t mean Libra will never launch, but there are some very crucial aspects which need to be addressed quickly and concisely.
