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Facebook Libra Faced with Challenges
Facebook has recently reported that it’s not sure whether Libra or other associated products/services will be launched meeting the deadline or will be launched at all. The Libra project is developed to enable FB’s billions of users to adopt cryptocurrency. It’s brought about major concerns among regulatory bodies.
According to Libra Head David Marcus, who’s recently spoken before the Senate Banking Committee, Facebook’s digital money doesn’t aim to compete with principal currencies and isn’t going to interfere with monetary policy.
Libra will get registered with the FinCEN (Treasury Department’s Financial Crimes Enforcement Network) as a business offering money services.
However, central banks, government ministers, and regulators want to know more about the Libra project. They’re worried about possible threats to central bank money and financial stability. Besides, they fear that this new cryptocurrency will pave a global path for money laundering and payment processing fraud.
According to Benoit Coeure, a board member at the European Central Bank (ECB), Libra must, first of all, prove its safety and only then expect to be approved. What’s more, Libra must provide users with ownership rights and privacy.
In fact, FB considers Libra a tool for making payments: the company doesn’t view it as an investment. Libra aims to make money transfers and interactions simpler and easier. The Libra Association isn’t going to store sensitive information: it’ll only keep basic transaction data. Moreover, FB isn’t going to provide the rest of the company with the data available on the Calibra wallet.
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Regulators, Lobbyists and Critics on Libra
Libra’s digital wallet Calibra is designed to be built directly into such popular apps as Facebook, WhatsApp, and Instagram. In fact, all of them belong to Facebook Inc.
In reality, Libra isn’t the only type of online money based on relatively new and unproven technology. As for the laws and regulations concerning in the field, there’s no certainty about them: they’re still in the stage of development. The G7 nations have recently developed a task force to keep an eye on the issues concerning digital money, with special attention to Libra.
According to U.S. congresswoman Carolyn Maloney, FB shouldn’t launch Libra at all. U.S. President Donald Trump, leaders of the G7 nations, and Mark Carney, the head of the Bank of England, are also concerned about Libra.
Now, the Libra Association is focused on including 50 external researchers in its beta program concerning the vulnerabilities in the code. The program is being implemented based on the partnership with the HackerOne bug bounty platform.
When it comes to Crypto lobbyists, they’re working on convincing lawmakers to avoid taking action against bitcoin and other already existing types of online money.
As for those who’re criticizing Libra, they think the latter’s planned structure resembles that of exchange-traded funds, which receive SEC (U.S. Securities and Exchange Commission) oversight. Namely, they mean the structure that operates as a coin backed by multiple currencies and short-term government debt.
Now, U.S. lawmakers are working on legislation that’d stop or make it difficult to launch Libra. Such legislation won’t let other cryptocurrency projects unaffected either.
To sum up, Calibra head David Marcus has recently reported that FB will put off the launch of the cryptocurrency until the company, together with the regulators and Congress, has sorted out the existing concerns about the Libra.