On June 18th, Facebook released a whitepaper introducing the launch of its new cryptocurrency, Libra. In a nutshell, Libra is a global currency launched by Facebook that makes moving money around the world “easy and cheap as sending a text message. No matter where you live, what you do, or how much you earn.”
The new form of payment is said to be based on the fact that people in many parts of the world are not able to tap into the same offerings as others due to the lack of ability to deal with funds the same way because of connectivity, location, and other reasons.
“When people are asked why they remain on the fringe of the existing financial system, those who remain ‘unbanked’ point to not having sufficient funds, high and unpredictable fees, banks being too far away, and lacking the necessary documentation,” according to the Libra white paper.
So, Facebook invented the Libra Blockchain, which will provide additional financial capabilities across the world. And while some people are excited about the possibilities, we’ve found that more and more of the buzz around the topic is negative, with people certainly proceeding with caution.
Facebook announced that 27 of its partners (think Visa, Mastercard, and Uber) have already signed up for Libra, but some are concerned. According to an article published in the New York Times, Libra has caused some doubt among government officials and regulators, with Maxine Waters, the chairwoman of the House Financial Services Committee and a Democrat from California, even scheduling hearings to examine Libra and asking Facebook to halt development of the project:
“With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users. The cryptocurrency market currently lacks a clear regulatory framework to provide strong protections for investors, consumers, and the economy. Regulators should see this as a wake-up call to get serious about the privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies. Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action. Facebook executives should also come before the Committee to provide testimony on these issues.”
Waters Statement on Libra (Source)
Following the announcement by Facebook, Blockchain prices surged, an event that was initially attributed to the Facebook reveal. (It’s actually up 245% in 2019 so far). However, according to Yahoo Finance , it was already up about 180% before the news and following the release dropped for a few days because people saw Libra as a threat to Bitcoin initially. And while it is predicted that Facebook’s crypto push will help surge other cryptocurrencies, we shouldn’t say that it’s the only factor.