In the course of previous days, various announcements have been made relevant to the Libra. They were not from Facebook, Calibra Wallet, Libra Association, or any other organization associated with its advancement.
First, leading crypto Binance declared a project and called it “Venus”, another astrology-themed name. It aims to concentrate on advancing ” localized satblecoin” all over the world. The People’s Bank of China (PBoC) stated that it is nearly all set to imitate its government-supported virtual currency. Reportedly, acknowledging that Libra provoked it to accelerate. Apparently, the youngest Bitcoin BTC millionaire, Erik Firman, inaugurated a crypto peer-to-peer (P2P) payment app. He named that app “Metal” and marketing as the “Libra Killer”.
In mid-June, since Facebook has issued Libra’s white paper, It has been emerging as a strong wave. It provoking regulators worldwide to establish global task forces. Also prompting the United States Lawmakers to hold various hearings in Senate and Crypto companies. Just to turn out with the beating projects.
Nevertheless, Libra is yet very far from being the flagship asset. Its first issue is scheduled for 2020 but given that the level of regulatory adverse reactions it has been facing, the future of Facebook’s crypto daring-journey is hardly unchangeable. However, within two months, its effect on the space is already noticeable.
Libra and The Regulatory Impact
Libra, a blockchain-based financial groundwork project, which Facebook publically declared on 18 June, when It released its report. This issue followed multiple media reports. That proposing social media’s prominent personality was advancing a Cryptocurrency that will adorn with payments facility throughout its forums. These include Watsapp, Messenger and Instagram, which boast unitedly 2.7 billion users on a monthly basis.
The project intends to hit the unbanked community. That accounts for approx 1.7 billion adults all over the globe, with a target of cross-border payments transactions. The later facet put Libra alongside the likes of Visa and Mastercard. And some native cryptocurrency organizations such as Ripple and the XRP token.
The Libra Association will regulate the project, a nonprofit cam headquartered in Switzerland. The project includes Mastercard, PayPal, Visa, eBay, Coinbase, Andreessen, Horowitz, Lyft and Uber amongst 28 Charter members.
Moreover, Calibra, a Facebook co-ordinated company, is emerging with an eponymous digital wallet to ease Libra payments. Though third-party wallet will sustain the currency- as the software triggering the Libra blockchain is open source, as its developers have stated. As it gets ready, then social media’s users will easily avail the wallet.
As Facebook’s project came to light, caused instant regulatory displeasure. That boosting a new wave of national-level debates on legality of cryptocurrencies. The company’s notorious Image for getting associated with privacy concern embarrassments. The recent scandal being Cambridge Analytica, which led to record-stealing, $5 billion penalties. Its all-inclusive scale and it’ss obvious concerns in cryptocurrencies made its target for regulators all over the globe.
In July, U.S Congressional hearings started on the issue and Calibra CEO David Marcus was interviewed two times In front of Congress. The key fact abstracted from those meetings was that Until the regulators’ worries are completely marked, Facebook will not initiate the Libra. As Marcus clearly convinced the legislators as well as the finances about the concerns. That has not completely diminished the adverse response. So, the European Union antitrust regulators have initiated a thorough investigation into Libra.
Directors of research and facilitator of institutional trading tools for digital assets at TradeBlock, Tohn Todaro abstracted the crucial causes behind the severe critical investigation in the statement:
“The primary attention Libra is getting is because of the size of Facebook, its resources, and its ability to integrate a low cost, efficient digital currency payment channel across a number of its own platforms. That could bring significant adoption to space. Other projects have not seen the same level of interest. Mainly because they do not have an ability to accelerate the adoption of a stablecoin so quickly, which Facebook could accomplish.”
Experts Outline, the level of regulatory adverse responses is not surprising despite the insight of Facebook’s project. Assistant professor of competition law and regulation at Leeds university, Kon Stantinos Stylianou, made a statement. Said, it is never too early to start worrying regarding potential issues for the regulators.
Further, he explained:
“Financial regulators are right to go in first because financial regulation aims to ensure that Libra and its clones comply with set standards before they launch. Other regulators, like the European Commission’s antitrust arm, which recently started an investigation into Libra, have a long way to go because they need to prove actual harm. But even so, their early activity sends a message to the industry that the regulator’s watchful eye is there to stop illegal activity at its inception.”
Further experts, one-time CEO at Saxo Bank and Lars Seier Christensen, chairman of swiss blockchain identity network has not aware of a few of the regulators’ consciousness. Christensen detailed further:
“I actually fully understand the concerns of regulators as Libra raises a host of major issues because of the potential scale of the project. I think Facebook may have been a little too quick off the block here because many of the concerns about systemic risk, disruption of money markets, and moral hazard were easily predictable and could have been addressed from the beginning.”
Libra’s Rivals; Chinese Government, Binance And Walmart
While a great deal If powers were busy discussing the efficient avenue to regulate Libra, China took a contrasting step. In East Asian powerhouse, where the authorities completely banned the sale of cryptocurrencies, Facebook’s project emerged as the primary motivator in quickening the advancement of its own state-regulated digital currency.
Marcus made a statement, said:
“I believe that if America does not lead innovation in the digital currency and payments area, others will. If we fail to act, we could soon see a digital currency controlled by others whose values are dramatically different.”
China Moves Forward
After five years of research and system advancement work since 2018, the PBoC is nearly all set to initiate its central bank digital currency (CBDC), as per the exclusive report from the State-owned news portal China Daily. As the Director of the Research Centre of Finance Technology and Cyber Security at the Renmin University of China, Yan Dong said to the publication that the launch of Libra has encouraged the project’s developers to include more private organizations in the advancement process of CBDC. Seemingly, that will pursue the idea of the Libra Association.
Co- establisher of Decentralized cloud computing network Aelf, Chen Zhuling, whose associate Ma Haobo is a committee member of the Chinese Institute of Electronics Blockchain Branch, told that:
“Considering how mobile payment and e-money has been fully adopted in Chinese society, it is inevitable that the government is also looking at digital currency initiative. More than half of the global Bitcoin hash rate is undermining pools in China, the government is no strange to cryptocurrency.”
Co-establisher of Qtum, a blockchain forum, Patrick Dai, told that PBoC’s currency Is probably to hit Facebook in term of public resonance. Furthermore, he said:
“People’s Bank of China’s digital currency will escalate. And it also affect crypto adoption at a much greater magnitude than Facebook’s Libra announcement. There is already an overwhelming distrust of Facebook. Introducing a new asset class also brings healthy competition to the Chinese FinTech ecosystem. That is currently dominated by a few major players. A complimentary payment solution helps break up the monopoly If power from payment giants like WeChatPay and Alipay.”
Finally, the professor Stylianou made a statement in the whole scenario, stated:
“Central bank cryptocurrencies and private cryptocurrencies are not in a zero-sum game. The adoption of one does not detract from the adoption of the other. They can and will most likely co-exist, much like state-provisioned goods co-exist with privately-provisioned goods in every other industry. This, of course, only applies to free capitalistic economies.”