The global financial system vs the cryptocurrency invasion
The crux of the issue is simple. Telegram tried to enter the financial market of the US through the back door in the tradition of the industry, circumventing all the regulators.
The company received the funding, but the governmental watchdog had been alert and prevented the break of a new cryptocurrency into the American financial system.
Aiming to issue the Libra cryptocurrency, Facebook has faced similar problems: the leading international banks and paying systems are canceling the cooperation due to the pressure on the part of the American government until all regulatory concerns are addressed.
And there are a lot of such concerns. Facebook’s cryptocurrency paying system that is yet to come has been preliminarily suspected of potentially possible international crimes such as money laundering and financing of terrorism.
Against this background, the American corporations Visa, Mastercard, eBay, and Stripe declined to participate, while Facebook had to reschedule the launch from June 2020 for indeterminate periods up to a few years.
According to Mark Zuckerberg, the cryptocurrency will not be launched before all the concerns from the Federal Reserve, and other regulators are addressed. He emphasized that he’s not trying to create a new sovereign currency that would compete with the dollar or other world currencies.
“I believe it should be as easy to send money to someone as it is to send a photo,” Facebook CEO said with hope.
But a noble humanistic goal like this will hardly impress American tycoons who have an eye for competitors with high development potential.
It’s interesting to watch how the counteraction will be progressing. But even now, it’s quite clear that the powers that be are not going to sit quite as an alternative financial system with no flaws of its aging precursor is unfolding before their eyes.
As soon as international tech companies such as Facebook and Telegram tried to become cryptocurrency systems, it turned out that the main advantage of a cryptocurrency — a lack of governmental control — cannot be relied on. Being subjects of law, the companies have been slapped a little. These bans, sanctions, legal actions, and other explicit and implicit restrictive measures are, basically, outlawing a cryptocurrency.
What we have here is nothing but the fight of nascent cryptocurrency systems with the monopoly of traditional financial structures, whose stance is obvious: money is money, whatever you call it, and the governmental oversight will be maintained over it.
The newcomers lost round one.
Will social platforms uniting millions of people be able to lead a cryptocurrency out of underground towards the mainstream?
In the end, one of the main advantages of a cryptocurrency is an ability to find an alternative way in places where others can see only a solid wall.
The fight is going to be really hot, anyway.
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Published at Thu, 05 Dec 2019 09:44:10 +0000
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