It has been a long and exhausting week for Facebook’s Libra cryptocurrency after the imminent crypto asset ended up on the wrong side of most prominent people. Just this week, the social media-backed virtual currency received criticism from the Chairman of the Fed Reserve, Jerome Powell, and soon after, the President of the United States, Donald Trump also tweeted about the dependability of Libra.
If that isn’t enough, Libra is in for a crucial week.
According to a Wall Street Journal report, it was confirmed that the structure of Libra’s cryptocurrency was currently under the watchful eyes of the Securities Exchange Commission, and the SEC was currently contemplating on how the virtual asset would be regulated in the market. The report questioned if Libra, which was already backed by multiple payment companies like Visa, Mastercard, and Paypal, would be considered as an exchange-traded fund [ETF] or not.
David Marcus, CEO of Calibra is also scheduled to testify in front of the Committee on Financial Services. The committee will hold a hearing at 10:00 am on Wednesday, July 17, 2019, in Washington. The current hearing is set to examine Libra and its impact on consumers, investors and the financial system.
A lot of the regulators have expressed their concerns that Facebook’s Libra could dismantle the global financial landscape and asserted that the crypto asset represented a type of security.
The memo also mentions that the SEC issued guidelines based on the “Howey test.” The Howey test includes a list of criteria/guidelines and if a digital asset met these guidelines, it would be declared security and would require to register with the SEC. Libra’s fate could be well-decided over the span of the next few days.