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Regulatory Series on Cryptocurrencies: Global Regulators’ and Policy Makers Perspectives on Facebook’s Libra

Entire cryptocurrency industry across the globe is under meticulous analysis post-Facebook’s announcement of Libra blockchain payment network. The House Financial Services Committee, Federal Reserve chairman Jerome Powell said that the current Libra framework has not absolutely addressed wider concerns around issues such as “Money laundering, data protection, and consumer privacy.” Powell said these concerns “will need to be addressed very thoroughly and carefully,” by Libra.

Offering an alternative perspective, on Friday, the Governor of the Bank of England, Mark Carney, acknowledged the issues within legacy money transfer markets. These are the issues the Libra network is attempting to address. Carney stated, “It’s way too expensive to do domestic payments. It’s way too slow, and that hurts consumers and businesses. It stifles innovation, and it’s far too expensive to send money cross-border.” Carney recognized that “we have to absolutely acknowledge the problem that they’re trying to solve. And if it’s not this, we’d better have some answers for what else it is.”

Carney’s perspectives suggest that some global regulators are viewing Libra as both a problem and an opportunity.

However, President Trump tweeted “I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto-assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

Upon his commentaries, Bitcoin registered 6.8% during the last weekend owing to his comments but erased the gains thereafter. Trump later appends by stating “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity."

As per President Trump’s tweet that Facebook Libra’s virtual currency will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks.

Finally, Libra project head David Marcus has written a letter to Chairwoman Maxine Waters and members of the House Financial Services Committee ahead of the upcoming Libra hearings, reports The Hill. Marcus wrote, "I want to give you my personal assurance that we are committed to taking the time to do this right.”

The team from the Libra blockchain project will publicly address questions from US lawmakers on Tuesday and Wednesday. The hearings follow a statement from top US senators demanding that the Libra consortium delay its attempt to roll out the cryptocurrency by the second half of 2020 as intended. Courtesy: BNC

By Niranjan Patil
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