Facebook libra

The Libra is Facebook’s new attempt at breaking into the world of cryptocurrency, however, new hurdles may be facing the social media company. Questions loom over how Facebook’s new currency will affect markets – and whether in fact the “Libra” is actually a cryptocurrency at all.

Cryptocurrencies by their very nature are decentralized, and the Libra is not. The only similarity Libra shares with other cryptos is that it is transferred using the blockchain – otherwise, it’s an animal all its own.

33 national groups are openly protesting the release of Libra, urging government officials and regulators to take action to halt its implementation. Groups such as citizen.org are demanding more details and transparency from Facebook before it’s eligible to get a green light from US regulators. Some of the questions the group, whose full name is “Public Citizen,” would like answered include:

– Will Libra encourage tax fraud or evasion?
– What impact will Libra have on developing economies?
– Will Libra place Facebook competitors at an unfair disadvantage?
– Can Facebook really be trusted to protect the privacy of Libra users?

Other organizations objecting to the launch of Libra include the US chapter or Friends of the Earth, Global Witness, RootsAction.org, The Economic Policy Institute, SEIU, and Demos. A letter released by the group is begging for answers to what they claim are serious concerns, mentioning a number of high-profile American politicians and congressmen.

Among these are the top-ranking Democrats and Republicans on the Senate’s banking and finance committees and the House’s Ways and Means, Energy and Commerce, and Financial Services committees. Various regulatory agencies were also targeted by the letter.

Several high-profile economists are also joining the fray in opposition to the new currency. Columbia University professor Joseph Stiglitz balked at the notion of entrusting Facebook with one’s personal financial wellbeing, stating that Facebook has already achieved a level of distrust that took much longer for even the banking industry to acquire.

SEC Deputy Director Elizabeth Baird doesn’t view “stablecoins” such as Libra as a currency at all, but rather a security. Major concerns linger over how Libra might be used by rich and powerful elites to embezzle ill-acquired funds or shield large corporations from paying their share of taxes.

Despite Facebook’s ambitions, the future prospects of Libra remain murky. Will regulators and Congressmen demand further investigation and transparency until Facebook gets its way? Only time will tell, but it would appear that Facebook has already succeeded in drawing the ire of many financial watchdog groups.

With so many eyes now watching intently on Libra’s release, it would appear Facebook may have to prove itself to the required politicians and regulators if it hopes to achieve the goals that Libra has set out to accomplish.

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