Libra’s regulatory mess is only getting started.
In the past week, United States’ Federal Reserve Chair, Treasury Secretary and even the President have come out in vocal opposition to Libra. Washington D.C. has become a regulatory battleground between Facebook and the administration.
With the stage set for Facebook representatives to head to Capitol Hill for their Senate Banking Committee hearing later this week, followed by an appearance before the House Financial Services Committee, Libra will be fired at from all angles.
During dire times like these, it is important for the cryptocurrency world to stick together. In light of this ‘brotherhood,’ a notable American cryptocurrency regulation proponent has shared her opinion, in the form of a “written testimony” to the Senate Committee.
Caitlin Long, the gubernatorial appointee of the Wyoming Blockchain Taskforce and Co-founder of the Wyoming Blockchain Coalition penned a piece titled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations,” to place before the Senate Banking Committee for the imminent hearing.
Right off the bat Long stated that Facebook’s Libra is “shining a light on outdated U.S. financial regulations” that hinder the nation’s economic growth and give “rise to the concept of digital currencies,” veering towards the stablecoin definition.
“So, if Congress wants to make stablecoins irrelevant (including Libra), it can easily do so—simply by allowing the banking system to consistently bank this new asset class.”
Rather than being fought against, digital currencies should be embraced, or else the trend will “move offshore.” Long stated that digital currencies are a “new, more efficient type of payment system,” and the interest it has garnered, in this day and age, cannot be ignored.
Long appealed to lawmakers to stop allowing the Federal Reserve to “protect the incumbent payment system,” one that is built on longer settlement times, inefficient transactions, and tedious timings. Instead, she suggested lawmakers open the door to “healthy competition.” Blockchain systems can and are making strides in this international payments conundrum, she added.
Long maintains that Libra should not be allowed to veer away from their initial claim of ‘100 percent backing by fiat currency.’ In light of the same, she wrote,
“Since Facebook’s project is in its infancy and could grow to enormous size, it is particularly important now to hold Facebook to its promise to keep Libra 100% backed, permanently.”
One of the main concerns regarding Libra is the company behind it. Facebook does not have the best of reputations in Washington, considering CEO Mark Zuckerberg spent much of his time in the capital before a Senate hearing in 2018, owing to the social media giant’s privacy problems.
Given this reputation and the US government’s knack for interfering in other people and countries’ affairs, Long stated that Calibra could be seen as a “surveillance tool.” Referencing this privacy dilemma, the article read,
“Congress should prevent governmental abuse of Calibra’s data by prohibiting its admission as evidence in U.S. criminal cases, unless the government first obtained a valid warrant for the data.”
The Facebook cryptocurrency project is not your run-of-the-mill payment project aimed at catering to the corporate world. Rather, it is one rooted in retail and small-scale customers, more widespread and diverse than the ones that have come before it, she wrote. The United States must accept this ‘non-status-quo focus’ and should avoid “playing catch-up” with world government’s adherence to the digital asset’s realm, Long added.
Stablecoins and the Libra association setting up shop in Switzerland were a result of “bad regulations” and should not be repeated. Caitlin Long concluded by saying,
” Rather than fight the first real innovation in payment systems in decades, the U.S. should embrace it.”