Federal Reserve Chairman Jerome Powell said his agency – as well as the rest of the federal government – will be looking carefully at Facebook’s Libra cryptocurrency.
He promised that Facebook would be held to very “high” standards, implying that the social media giant should be able to operate successfully.
“Libra’s a new thing; we are looking at it very carefully. Given the possible scale of it, I think that our expectations — from a consumer protection standpoint, from a regulatory standpoint — are going to be very, very high. […] Authority for overseeing Libra is going to be in several places, but I think that the big picture is we are going to be looking really carefully at it.”
When you have a significant company like Facebook talking about entering the financial space, governments finally get antsy. Whatever Facebook is working on, they’re skeptical, and they want to know everything.
Facebook so happens to be building a form of cryptocurrency. As a result, renewed scrutiny on a growing industry.
But perhaps the unsung advantage to Facebook entering the crypto space is Facebook’s lobbying efforts doing the same. Facebook has a legion of successful lobbyists.
If they focus their attention on blockchain issues now, will that equate to a regulatory boom for crypto?
For most in the space, the main benefit will be the legitimization of the blockchain. If Facebook is doing it, how can it be so bad?
Many believe this attitude shift will lead to an overall push from the general public: retail FOMO will begin.
Some officials, like Maxine Waters, feel very threatened by Facebook’s entry into crypto. She’s called for the company to halt development.
For its part, Facebook acknowledges that Libra presents no useful threat to Bitcoin. However, if the crypto is immediately usable at places like Uber and PayPal, it will be interesting to see what effect that might have on existing markets.
Facebook, by itself isn’t as important as all that’s come before it. For its part, the social network is building on the shoulders of giants. They’re not the only ones in the social media space, either. Telegram is launching its own blockchain, complete with the Gram token.
Some concerns arise from the fact that Facebook already has so much data on everyone. Adding in financial information gives them a complete profile.
How big a picture would it give them into the crypto world? How many Facebook profiles could be traced to exchanges, and so forth?
The need for privacy becomes more self-evident than ever. Facebook won’t be offering a realistic version of a privacy coin, or anything of the sort. Facebook will provide a fully regulated, limited use token that transmits value across its massive network. If done right, they could force its usage into several aspects of the Facebook ecosystem. This move alone would provide a “use case” for Libra.
Last modified: June 23, 2020 7:37 PM UTC