Governments Will Support Facebook’s Libra- As Long As They Have A Large Slice Of The Pie
There has been a lot going on lately in the crypto-sphere. From Bitcoin’s highs and lows to the Bitpoint exchange hack. News journals have been swamped. All this aside though, no story has received as much coverage and attention as Facebook’s Libra.
Libra, Facebook’s cryptocurrency is a financial platform that enables more accessible and faster online payments. Is it a goal? To create a token that can be seamlessly and instantly transferred via popular services like Messenger and WhatsApp.
Although under Facebook, Libra was developed under Calibra, Facebook’s subsidiary, which is a separate entity that is purposely meant to safeguard consumer’s financial data.
Libra Has Been Met With Much Negativity From Authorities
Since it was unveiled, Libra has received quite the chilly reception, especially from some policymakers. Who says the company shouldn’t go forward without addressing issues related to only trust and privacy but with money laundering as well.
Regulators are afraid Libra would provide people with all the necessary tools to allow users to engage in money laundering or to finance terrorist attacks and therefore need reassurance that Facebook and the relevant Libra Associations have put in place adequate protocols that will protect ownership rights and users’ privacy.
Part of the reason why this is raising so much concern is that with recent issues against Facebook, the introduction of a decentralized system like Libra essentially puts the network far beyond the regulators reach.
Libra’s head and Facebook Executive, David Marcus points out that every transaction that takes place on the platform will be almost private, in that the user’s identity will not be publicly accessible. That only the transaction, transaction amount, and timestamp will be public. He also goes further to point out that Libra will be an open-source platform and that developers will be able to design their digital wallets and mainly be in control of the type and level of data they require from their customers plus that Calibra would never disclose account or financial information to Facebook without customer consent.
As Long As Those In Power Get Their Due, Libra Will Survive
Benoit Coeure, the European Central Bank board and chair to an international Libra working group say Facebook can’t afford to make a mistake with its venture and needs to ensure its offering is safe from the start.
If hypothetically, the regulators decided to close down the Libra platform for failing to comply with privacy or trust laws it would be counterproductive because it could drive all its mining activity overseas. This would cause an even bigger problem; therefore, in this instance, it’s much better to focus on ensuring Libra is compliant and always in check.
Even then, because of its nascency, it will still take some time before there is a robust regulatory framework that’s able to oversee decentralized platforms like Libra.
Featured Image Source: CNN