By the look of things, Libra will be attracting more regulators than customers.
Facebook’s foray into the cryptocurrency world began last month when Libra was unveiled and lawmakers across the world lost it. Politicians in the United States, France, the EU, Australia, and Singapore have all expressed their concerns about Libra, culminating in the recent US Congressional hearing.
The Chair of the Federal Reserve, Jerome Powell, sat before the Financial Services Committee to discuss, among other things, Libra.
Following the hearing, several lawmakers responded to Powell’s criticism of Libra with support and resentment. Interestingly, one Congressman was educated on the topic, and hysterically differentiated between Libra and LIBOR.
Senator Sherrod Brown [D] of Ohio saw the Facebook crypto-foray as an attempt by the Big-Tech world to rival the Big Banks of Wall Street. The senator also echoed the concerns of Chairman Powell with respect to money laundering, data security, and financial instability, referring to Powell’s statements as “the right things.”
One of the more wary senators about Libra, Sen. Brown, even wrote a letter to the Fed which detailed his reservations about the global payments project. He stated,
“There is bipartisan rallying around learning more about Facebook and doing what we need to do to protect privacy, to make sure that Facebook and the power of the tech companies now rivals the Wall Street in the halls of Congress and in the economy.”
From the man to the maker, Sen. Brown spoke about the skepticism regarding Facebook following their alleged use of non-state actors to influence the 2016 US Presidential elections. It should be noted that Facebook was also hit with privacy accusations in 2018, which dented the Menlo Park giant’s stocks. He stated,
“People don’t trust Facebook right now. They’ve earned that mistrust or distrust from the 2016 election to how they’ve rolled out Libra and we’re watching.”
Finally, the senator from Ohio spoke about data and privacy concerns, while equating the Facebook issue to Equifax, the data management company which suffered a massive data breach and exposed sensitive information of over 140 million customers in 2017.
However, some other congressmen are looking at Libra as a “lost opportunity,” with the association setting up show in Switzerland. Rep. Warren Davidson [R] and Rep. Josh Gottheimer [D], spearheads of the Token Taxonomy Act stated that if the US had more regulatory certainty in the cryptocurrency sector, Libra would not have crossed the Atlantic.