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Digital Currency/Stablecoin/Tokenization Series: Facebook’s Crypto Project ‘Libra’ To Combat With Initial Setbacks
Facebook’s crypto-project initiative ‘Libra’ has been confronting various hindrances before an actual take-off, talk of the town across the globe and reinstating the project is the most buzzing topic even within the U.S. region. The recent trend is that, Libra is perceived to be risky. A senior U.S. Treasury executive gave some guidelines as to how the Libra system has to abide by the compliance and the highest standards for ensuring safeguard from the money laundering and terrorism financing.
The Under Secretary of the Treasury for Terrorism and Financial Intelligence, Sigal Mandelker, said reporters in the Swiss capital,
“Whether it’s bitcoin, Libra or any other cryptocurrency, our message is the same to all of these companies: anti-money laundering and combating the financing of terrorism has to be built into your design from the get-go.”
Elsewhere, the French finance minister Bruno Le Maire attacked Facebook’s Libra and said that the country will block the development of the digital currency in Europe.
Foreseeing that the Libra could be potential risk and threat for the country’s sovereignty, the precautious actions were taken as the ministry is concerned about Libra’s impact on the financial stability, as per Reuters report.
While ECB board member Yves Mersch also said in the recent past that the global acceptance of Libra currency could even destabilizethe European Central Bank’s ability to set monetary policy, a potential risk for the currency bloc as well.
While in the infant stage, Libra received an early blowfrom the Indian government as well. The governmental authorities don’t seem to be keen on the facebook’s crypto-project, claiming that “design of the Facebook cryptocurrency has not been fully explained, ”India‘s Economic Affairs Secretary, Mr. Subhash Garg clarified to Bloomberg in the past.
In addition, the director of the digital-asset strategy at investment management firm VanEck, Mr. Gabor Gurbacs discussed with the Fox Business host Liz Claman at Senate Banking Committee hearing on Facebook’s Libra “cryptocurrency.” He tweeted by stating that Libra is not ETF but a stablecoin pegged to the basket of fiat currencies.
Well, in combating with various hindrances, we have reported that there have been some predominant factors in order to precisely assessLibra in comparison with the fiat money or other crypto pairs, and banking. It could even be the pros or cons, constructive or destructive factors. The destructive factor is that the Libra data structure is a database, not a blockchain, and the Libra consortium is a hedge fund, not a network of nodes.
The constructive point is that Libra is likely to be accustomed with the billions of users to digital bearer assets, and maybe a force for great social good in the short run. The ugly is that it will be a force for great social evil in the long run.
The common consensus among Bitcoin enthusiasts and other cryptocurrency investors seem to be that Facebook’s Libra Coin will stimulate mass adoption. The team from the Libra blockchain project has been publicly addressing interrogations from US lawmakers.