By
Chimamanda U. Martha
April 25th, 2024
U.S. lawmakers have been skeptical about Facebook and the libra coin and some of the Libra Association look to distance themselves from the project.
Ever since its announcement in mid-June 2019, the Libra Coin has been dealing with pressure from the public and U.S. regulators. Facebook, the social media giant, has been prone to hacking risks that have led to the breach of information security.
U.S. lawmakers have been skeptical about Facebook and the Libra Coin. Today, it seems like the pressure is no longer bearable, and some of the libra association members are opting out.
The Center of the Problem
It all started in July 2nd when MaineWaters, a U.S. congress woman wrote to Libra Association requiring the team to cease any development on Libra Coin.
According to the letter, the Libra Association was supposed to pause any development until the financial service committee, and other associate subcommittees discuss the possible risks of libra coin on the global financial system.
According to the reports reaching us, the Libra Association is under tension as some of its key members are opting out.
A report released by The Financial Times on August 23rd, 2019 indicates that three firms, which were crucial shareholders, have resolved to back out due to pressure from regulators and the potential threat to the economy.
The Libra Association is comprised of 28 members, including Facebook and telecommunication giants such as Visa and Mastercard. Each of the members was supposed to invest an amount not less than $10 million.
Suddenly, the Association is falling apart, two of the members backing out attributed it to regulatory pressure while the third linked the fall out to the public support of the project which could draw unnecessary attention of the overseers.
“It’s going to be difficult for partners who want to comply with regulators policies to be out there declaring their support for the proposed digital coin,” said one of the members.
The fall out has not gone well with Facebook, and one of the members backing libra was quoted saying that, “Facebook is tired of being the only people putting their neck out.”
Most cryptocurrency exchanges like Binance exchange have been experiencing challenges. We all remember of the recent cyber attack on Binance exchange that cost the company approximately 7,000 Bitcoins in a single transaction.
The credibility and reliability of both the developers and exchange platforms are current issues affecting blockchain. These might be some of the reasons why the regulators are so keen on scrutinizing the system to determine its reliability to avoid some of the occurrences that have had paining cost on investors.
Just two days ago, reports circulating online indicated that the European Commission, which is the E.U.’s executive body was in a move to launch investigations on Libra Coin.
The reports we have received indicate that the Libra Project is being investigated of possible anti-competitive behavior. Moreover, six members of the Financial Service Committee in the American House of Representatives went to Switzerland to discuss cryptocurrency projects.
It is evident that Libra has been peck in the eyes of the regulators; this could be attributed to the poor handling of data storage and misuse of consumer information by the social media giant. So, how is the public expected to trust such a company with questionable ethics?
Final Take
Regulatory summons has not prevented the backing members from pursuing their interests. While the sauce is too hot for some members, some potential investors are willing to chow it hot.
A cryptocurrency exchange based in Taiwan has expressed its interest to join libra with the hope of dominating the Asian-pacific region. Some crypto experts have indicated that Libra has the potential of dominating the crypto market if the inherent issues are addressed on time.
Others have it that the only threat facing Libra is privacy issues associated with Facebook and digital identity.
The cryptocurrency market is quite young, and new issues are emerging every day. Let’s wait and see how these issues will be managed to stabilize the dwindling cryptocurrency boat.