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Facebook’s cryptocurrency Libra is pressuring regulators to act fast
Facebook has been under scrutiny lately but not because of its alleged inability so screen out fake news from going viral on the platform. This time, the concern came from financial regulators due to the social media platform's decision to launch its own cryptocurrency Libra.
Facebook wants its users to use Libra opening up the possibility of a massive digital marketplace that is truly global in size. With its technical muscle, the social media giant is prepared to go all the way to support the digital currency and has even created its own crypto wallet called Calibra, which will work seamlessly with existing messaging systems WhatsApp and Facebook Messenger, according to The Coin Republic.
Understandably, some financial regulators, who were already uncomfortable with cryptocurrencies, to begin with, are increasingly worried. Despite Facebook CEO Mark Zuckerberg’s promise of faster and cheaper money transfer, regulators voiced skepticism on whether or not the platform has what it takes to ensure consumer safety and privacy as well as market stability, according to Financial Times.
Things even heated up to the point that some of Libra’s initial backers decided to withdraw their support. For instance, Visa and Mastercard already opted to leave the project.
As expected, some central banks worry about losing control over their own monetary market. With over two billion users, Facebook’s Libra could pave the way for a gargantuan yet borderless market once the cryptocurrency gets the regulatory nod.
But some regulators already realized that totally resisting digital currency is a futile undertaking. To minimize the threat of potential disruption cryptocurrencies might pose, some regulators such as the European Central Bank are pushing for their own digital currency as an alternative to privately-issued ones.
Bank of England governor Mark Carney even proposed the use of central bank-issued digital currency to replace the greenback for international settlements. Basel-based Bank for Internation Settlements already appointed ECB board member Benoît Cœuré to come up with a cryptocurrency model that can be used by central banks for their own issuances.
Whether Facebook’s Libra eventually takes off or not, it has already done its job in pressuring regulators to come up with concrete solutions fast. But Deutsche Bank is betting that Libra is set to happen and when it does, it will hasten mainstream crypto adoption by 2030.