Mixed reactions have trailed the official announcement of Facebook’ native cryptocurrency – Libra.
A cross section of political figures and top ranking members of the cryptocurremcy community have all expressed views on this latest stablecoin. While some have called for a referendum, others ask for a guided approach and the rest seem fully in support.
See details of the Facebook’s Libra coin here
First we take a look at reactions from top figures in the cryptocurrency community:
Justin Sun, CEO and Founder of BTT and Tron Cryptocurrency, currently trending for his 4.5 million lunch with Warren Buffet, remarked:
Facebook and LIBRA, I feel a huge FOMO and bull run for crypto is on its way.
Sun always hyped about the future…YEAH!
Andreas Antonopolous, a notable Crypto figure says:
While Facebook’s Libra doesn’t compete against any open, public, permissionless, borderless, neutral, censorship-resistant blockchains, it will compete against both retail banks and central banks. This is going to be fun to watch.
On his part, CEO of Binance, Changpeng Zhao spoke from a diplomatic standpoint:
Facebook Libra coin doesn’t need KYC. They have so much more data on the 2 billion people. Not just name, id, address, phone number. They know your family, friends, real-time historic location, what you like…They know you more than yourself. And now your wallet too. Best AML!
Another crypto commentator opines:
Facebook is going to be the biggest crypto onramp and LIBRA the most used cryptocurrency for a while. Sending and receiving crypto is going to be mainstream. That’s for sure now.
Reactions from the Political and Financial Institutions
Outside the cryptocurrency community, Facebook’s Libra Cryptocurrency has seen appraisal and huge criticism especially from European regulators who believe that allowing Facebook to introduce its sovereign currency would give the social media giant enough power to become a “shadow bank” says German Politician Markus Ferber.
The French Speak
French Minister of Economy and Finance, Bruno Le Maire in a broadcast has said the government intends to ask Facebook “for guarantees” with regards to Libra. Outside these guarantees he says:
It is out of question that Libra become a sovereign currency. It can’t and it must not happen.
Countering the French minister’s outburst, US 2020 Pro-Bitcoin Presidential Candidate; Andrew Yang remarked:
The new Facebook-backed cryptocurrency Libra could be a big step for millions of unbanked around the world. It’s use of blockchain makes a lot of sense. Could even curb corruption; as a lot of int’l aid money intended for impoverished people never reaches them.
Bank of England Governor: Faceboook Libra Cryptocurrency Has Its Uses
Head of UK’s central bank, Mark Carney while speaking at a conference of central bankers stated that the new Facebook Libra cryptocurrency could have genuine use cases. He however noted that prior to a general acceptability of the Facebook coin, the governors would look at Facebook’s proposal “very closely and in a co-ordinated fashion at the level of the G7, the Bank of International Settlements, the Financial Stability Board and the IMF.”
Carney however lauded the project as a potential fintech milestone which would solve the issues of cost and speed lagging in current financial system.
US Congress: Asks Facebook to Halt Development of the Project
Soon after the release of the Libra white paper by Facebook, chairwoman of the U.S. Financial Services Committee – Maxine Waters requested that Facebook halts development of the project prior to a U.S. Senate Committee on Banking hearing about the project on July 16.
In her words:
Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data. With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users.
Another Democrat, Senator Sherrod Brown focused on the need to curb Facebook’s influence:
Facebook is already too big and too powerful, and it has used that power to exploit users.
A more positive remark came from Sheila Warren, Head of Blockchain and DLT Technology at the World Economic Forum:
Blockchain is a team sport and Facebook’s creation of the Libra association demonstrates this principle. Libra’s success will depend in large part on how well the association functions to cement construction of the network and adheres to its core principles.
Russia’s Duma Commitee: We would Not Legalize the Token
In a rigid response to the launch of Facebook’s token, Chairman of Russia’s State Duma Committee on Financial Market – Anatoly Aksakov has said that “the country would not legalize the use of the token.” Citing a possible effect on their financial system.
Head of US Federal Reserves: Libra Carries both Risks and Benefits
Jerome Powell, head of the United States Federal Reserve says he recognizes both potential benefits and risks to Facebook’s recently released cryptocurrency project.
Speaking at a press conference, the chairman said he believed that digital currencies will take quite sometime to replace regular bank currencies; just as he attested to the tremendous amount of innovation in financial technology.
He went on to confirm that Facebook and the Fed had been in discussions; just as the social media giant did with lots of people and agencies. However, he expressed his view that the Feds have no plenary authority over cryptocurrencies, “they only play into our world due to the need to ensure consumer protection and money laundering checks.”
My Humble Opinion
From all indications, the fight is against the launching company (Facebook) and not cryptocurrency.
Or probably European nations like Russia are against another financial or monetary domination from the United States; considering their hostile trade relationship.
That said, the major stake here for top players is the issue of data privacy. It will be recalled that the US Senate had summoned Facebook CEO Mark Zuckerberg late last year, to testify over a data and information privacy case. Many across the US and Europe feel the company wields too much power and has users giving up information that could influence major decisions including those involving their finances.
I find this a bit funny, more like they speak from two sides of their mouths. Why? These same top government officials have continually championed Know Your Customer policies and Anti Money Laundering guides which from a Facebook perspective is ‘automatically’ handled. Just as CZ CEO of Binance highlighted, Facebook has information down to your neighbours; so what’s the stress? This ensures enough regulation already.
On the other hand, is the cryptocurrency community, mostly happy adoption is coming; with Facebook’s cryptocurrency over 2 billion people will be reached and what’s more, adoption will spread.
There is however a consensus that the Facebook coin is no competitor for BTC. First, it’s a stable coin and goes against some core cryptocurrency maximalist principles such as decentralization, censorship resistance and privacy.
Even though Facebook has given guarantees by separating the Libra Company from its social media institution and having distributed control nodes to partnering members on the network to promote decentralization; many crypto maximalists do not trust these guarantees.
In the crypto space, most are indifferent to Facebook’s launch in terms of potential; others are happy that a cryptocurrency to challenge retail and central banks has been born; which explains the harsh reception in financial and political quarters.
Either way, let’s see how this unfolds…July 16, Libra D-Day happens.
Will the Libra stop Facebook from commercializing user-behaviour metrics so as to gain trust? Will Libra keep Facebook accountable to align its currency interests with its social media platforms?