Facebook turns the page on cryptocurrency regulation
By Christopher Attard
Facebook has hired a lobbying firm that aims to ease regulatory pressure on the Libra cryptocurrency project amidst an extensive crackdown by global authorities.
Putting pressure on the regulators
Facebook’s Libra coin has already garnered the attention of many regulatory bodies around the world.
In the press release, the social media giant revealed that it is currently working with FS Vector, a firm that specialises in regulatory compliance, public policy formation and business strategy. As per the filing with the U.S. congress, Facebook’s FS Vector works on blockchain technology policy formation as well as financial and cryptocurrency matters.
The social media giant announced its plan to launch its crypto project through Libra back in June, which is set to be integrated with Messenger and WhatsApp in order to process fast and cheap transactions on a global scale. Consequently, the House Financial Services Committee Chair Maxine Waters (D-CA) called for a moratorium and Congressional review of Facebook’s Libra project. This initiated a landslide response, wherein a slew of regulators from the UK, France, Singapore and Italy began expressing reservations about the project.
Jerome Powell, the Federal Reserve chairman also alluded to some serious concerns relating to privacy, money laundering, consumer protection as well as financial stability in his criticism. Shortly after, the US President took to Twitter to state that companies which offer financial services such as Facebook must be compliant with banking regulations in the country.
A global currency war?
One of the critical issues with Libra, in part raised at the G7 summit was the concern of rights and responsibilities relating to currency. In fact, Bruno Le Maire, France’s finance minister and current G7 president said in a press conference that the group was against the idea of companies having the same privilege as nations in creating means of payment – without undertaking the responsibility and obligations that go with it.
Looking at the bigger picture, this means that Facebook’s control over one of the largest currencies in the world could work as an alternative global currency to the USD, which could in turn ignite a global war among private, government and public sector currencies. Indeed, in the not too-distant future, Facebook’s billions of users could drastically reduce the number of fiat currency users around the world.
Needless to say, Facebook’s Libra exists in stark contrast to the original decentralised cryptocurrency that emerged after the 2008 financial crash – Bitcoin.