Facebook Request Cuts Both Ways
There are two ways to examine Rep. Waters’ request. First, it’s a good thing for cryptocurrency whether Facebook honors her request or not. Second, Rep. Waters is assisting the public by stalling investment in another dangerous cryptocurrency.
Maxine Waters said:
“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. The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy. Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.”
Bipartisan Support Happens
Lest Americans think that the two parties never work together, Maxine Waters was asked to call for a hearing on Facebook's Libra by the ranking Republican on the House Financial Services Committee, Rep. Patrick McHenry (R-NC).
“While there is great promise for this new technology in fostering financial inclusion and faster payments...there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework. We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the financial system.”
Crypto Wins Either Way
Maxine Waters’ request could also be seen as a bullish sign for both Libra and the broader cryptocurrency market. Were Facebook to agree, which is highly unlikely, the federal government might just get around to codifying its regulatory position on cryptocurrency and bitcoin.
That might bring some stability to the market, where cryptocurrencies are extremely volatile.
Yet even if Facebook chooses not to agree, it fuels the cryptocurrency argument that it should not be regulated by any government.
That’s the very point of it, after all.
Bulls want cryptocurrencies like Facebook's Libra to be entirely unregulated and not beholden to any government.
Facebook Wins, Too
Facebook also wins whether it caves to Congress or not. If it does, it's a solid PR optics move for the embattled company. It displays a bit of contrition from the normally obstinate Mark Zuckerberg.
If Facebook ignores Maxine Waters, there's little that Congress can do to stop Zuckerberg. Libra still goes to market, faster than it otherwise would, and crypto bulls will celebrate the move.