Home / Capital & Crypto / Facebook Libra’s Stark Reminder: Mass Regulation Before Mass Bitcoin Adoption

Facebook Libra’s Stark Reminder: Mass Regulation Before Mass Bitcoin Adoption

Last Updated March 4, 2021 2:36 PM
P. H. Madore
Last Updated March 4, 2021 2:36 PM

By CCN.com: As expected, the US government has an interest in Facebook’s Libra project. The biggest regulatory organization in the world is sure to take notice when the world’s largest social network moves into the world of banking and personal finance.

Suddenly, Blockchain is Legitimate

Facebook’s aims are from limited to the US, however, and their cryptocurrency will be backed by a “basket” of assets including the dollar. In effect, during times of turmoil, the Libra could be one of the stable-r currencies for the everyday person to use.

As some in the industry have pointed out, the hype is extreme around Libra.

The thing is not even a valid blockchain by several accounts, and it struggles to establish itself in an industry whose talent is ideologically placed. Which is to say: you can’t just buy your way into blockchain. You need to come by it honestly.

Hiring the best you can get from a relatively nascent industry is only going to carry you so far. For a blockchain project to truly succeed, a visionary leader who feels the weight of his project is necessary — someone who both understands the technology and knows how to create the elements missing for success.

Facebook’s crypto foray is arguably the highest-profile development in the industry yet. | Source: Amy Osborne / AFP

Pointing out that Libra is not like Bitcoin is not a useful comparison. No one’s saying that Bitcoin is the most useful blockchain or cryptocurrency. In several ways, it pales in comparison to some of the alternatives, depending on what you’re looking to do. When it comes to commerce, stablecoins, and blockchains with more space make more sense. When it comes to building, platforms with programming languages built-in like Libra and Ethereum make the most sense.

Due to several turns of events, the best place for Bitcoin is liquidity underpinning the broader crypto market, at this point. A metafunction, indeed, the reality is that the other uses for blockchain will likely emerge elsewhere.

Will Facebook be one of those places?

Let’s go ahead and doubt that. As CCN.com’s Ben Brown said, the real upside is that Facebook is associating itself with crypto and blockchain. It’s beside the point whether they are in the space at this point.

Libra Realities: Massively Used Products Get Massive Regulation

But, as expected, the government and court systems suddenly have a renewed interest  in crypto. If we consider Facebook a business and its users to be customers, then it’s one of the largest companies in history. Therefore, the US government can be expected to take an interest in virtually anything the company does. Entering crypto in quite the way they have, they’re bringing perhaps undue attention on the space, which has recently been subject to new calls for banning.

All things being equal, this is the expected side effect of mainstream corporations splashing around in the crypto space. Governments will suddenly have a new interest, if not respect, in the industry. Whether or not that translates to some finality in the regulatory situation remains to be seen. While that would be a good side effect, let’s consider some other benefits.

Facebook brings with it a significant government lobbying presence that it has long used for other pursuits. Now the same weight can be applied to crypto subjects, such as the Token Taxonomy Act.

Facebook is creating jobs in the blockchain industry with Libra, and reportedly being very aggressive about trying to get the best it can.

The social network may or may not provide a valuable service to some people who lack banking.

And the list goes on.

So while the hype is definitive around Libra, credit where it’s due. We should only be concerned about government intervention we might experience.