Facebook crossed the Atlantic, leaving US Congressmen pointing fingers.
Libra, the cryptocurrency project launched by Facebook could be left in the docks before it sets sail for Switzerland. After running into harsh winds at the hands of Jerome Powell, Federal Reserve Chair during his hearing before the House Financial Services Committee, the prospects for Facebook and their crypto-foray look bleak.
Powell reiterated the concerned stance of the members of the committee, adding that Libra ‘cannot go forward,’ until Facebook addresses the concerns of money laundering, privacy, financial stability among others.
To this effect, Powell seemed to have rocked the ship, leading to the larger cryptocurrency market falling seasick, shaving over $30 billion hours after the hearing.
However, while the overwhelming attitude of the Capitol Building towards Libra and the larger cryptocurrency world is fearful and skeptical, some congressmen have diverged, and in fact, has taken a lesson from Facebook’s decision to set-sail across the Atlantic to set up their Libra HQ in Switzerland rather than the United States.
Rep. [R] Warren Davidson, and Rep [D] Josh Gottheimer two spearheads of the Token Taxonomy Act spoke to Bloomberg regarding their, less skewed, stance on cryptocurrencies and Libra.
Coming across the political divide, the Republican and Democratic members of Congress have jointly pushed to Token Taxonomy Act which seeks to remove virtual currencies from the definition of ‘securities,’ via an amendment to the Securities Act of 1933, and the Securities Act of 1934.
Speaking on the issue of regulatory certainty, and how the same should have been ushered during the introduction of Libra, Davidson stated,
“The reality is, the companies that are leaving the United States of America aren’t leaving to avoid regulations, they are leaving to find legislative certainty. And that is the big part of why Facebook is launching Libra in Switzerland.”
The regulatory-confusion in the American digital assets space is forcing several start-ups to move out of the country in order to work in a regulatory-certain environment, attested Gottheimer. The “Rules of the Road,” and the “directions,” for their functioning are unclear, hence resulting in company exodus.
On the consumer front, legislative certainty will also greatly bridge the “information gap,” which if flaunted can be used by fraudsters in nefarious ways. In order to protect American consumers and financial innovators, legislative certainty is required.
Davidson added that with the launch of Libra, the work he and his colleagues have been doing to clear-the-regulatory-clutter so to speak, will not come up on “the radar.” He hoped that the Libra announcement will create momentum in order to push lawmakers towards regulatory certainty.
Gottheimer detailed that the Token Taxonomy act will detail which companies, regulators, regulatory agencies need to be cooperated with when a project like Libra is introduced. He added that the act would eradicate ‘unnecessary regulation,’ and ‘out-of-date regulation.’
He placed the onus on, as the theme of the article goes, regulatory certainty,
” How do we actually make sure that we have a new framework where people can operate and keep jobs and growth here. My fear is, and you see this absolutely with Facebook is that other companies are saying ‘well, since we don’t know what the rules of the road are here, we’re going to go elsewhere, where we have that certainty,’ and we are losing jobs, we are losing investment, and we are losing businesses. We just can’t afford to have that.”
From the looks of things, Facebook’s Libra project already sailed into troubled ‘Waters,’ with the recent Powell-hearing, but the Token Taxonomy Act can look to turn the tide for future voyages.