Facebook’s Blockchain-based cryptocurrency- Libra in trouble!
Facebook has planned an initial release of Libra in 2020. But it has been facing lots of trouble.
Libra is a permission block chained currency or digital ledger developed by reputed social media company Facebook.
Even though the currency and network do not yet exist and is planning to be released by 2020, it has been facing lots of troubles lately.
Facebook’s very own cryptocurrency was met with heavy opposition due to the involvement of social media companies in Cambridge Analytica and election controversies and is highly influential. This also leads to break the trust with the authorities.
Authorities point out that libra contains loopholes for criminals to exploit and this project can attenuate the national dollar since it fails to provide clear structures of regulations.
In abridge, Libra needs government support to do away with the dollar or similar currencies. Libra must prove it is safe and secure to move ahead. Otherwise, it poses a risk at a global economic and financial system. That results in denial of approval from regulators.
Report regarding Libra was put forward by the G7 taskforce, they include senior officials from central banks, IMF and financial stack board that controls G20 economies. Report points out nine risk factors posed by Libra. Libra explains itself as a stable coin rather than normal cryptocurrency. So that it doesn’t face crazy swings and ups and downs. Facebook intends to facilitate online payment. And government authorities don’t find a security system that is not explained by Facebook until now. Due to the controversy and speculations Mastercard and Visa, stripe, eBay and PayPal have informed their disappointment and are withdrawn from the particular scheme.
In a draft report submitted to the G20 finance minister clearly explains their issues.
Stablecoin projects of potential global reach and magnitude must meet the highest regulatory standards and be subject to prudential supervision and oversight. Possible regulatory gaps should be assessed and addressed as a matter of priority.
The regulatory authority needs the consumer to be secure and make sure the cryptocurrency is not used to launder money or being used for crimes like sex trafficking, illegal weapon deals, etc. The intention is to ensure that the currency is not used to undermine the laws.
Currently, Facebook is working to win regulations on Libra. Libra doesn’t face competition with cryptocurrency but actual money.
On one hand, Libra’s difficulties derive from a growing skeptical towards big tech firms. Facebook, Google, and Amazon are all involved in antitrust investigations that intend to create more pellucidity on how data and user information are used. Bringing money into the mix could complicate matters much further — Facebook needs to rethink where it’s plausibility stands first.
On the other hand, governments around the world are caught in a decision between digitalizing currencies and clenching on to the conventional methods. While governments around the world are still puttering with the idea, Facebook just went one step ahead to pull all its 2 billion users together with one privately-held currency. That’s perhaps too much to withstand right presently.
Published at Tue, 31 Dec 2019 14:56:05 +0000
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