US Chair of Financial Services Requests Facebook's Libra Crypto Project Halted

Jeannie Matthews
June 20, 2019

Calibra will have its own standalone app but you'll also be able to use it to pay people within Messenger and WhatsApp as well as - presumably - Facebook itself.

The nonprofit Libra Association based in Geneva will oversee the blockchain-based coin, maintaining a real-world asset reserve to keep its value stable.

Analyst and cryptocurrency investor Lou Kerner said Facebook's move has the potential to open the door for cryptocurrency to a wider public.

Coincidentally, the name Libra comes from the Roman measurement of weight - its why we measure pounds of weight in lbs. "Just as people can use their phones to message friends anywhere in the world today, with Libra, the same can be done with money - instantly, securely and at a low cost", Facebook said in a Libra white paper. Facebook has also set up a non-profit "Libra Association", in Switzerland, comprised of the companies that have already backed the project, including Visa, Mastercard, PayPal, Uber, Stripe, and Booking.com.

Suntrust: "We believe this is a major initiative for Facebook, and one that has the potential of putting the company front and center in areas beyond advertising, including commerce and financial services, materially expanding its [total addressable market] and growth prospects..."

She also added that Facebook had "repeatedly" shown "disregard" for customer data privacy, and that it had "exposed Americans to malicious and fake accounts from bad actors, including Russian intelligence and transnational traffickers".

The above picture from a Facebook press release gives us some idea of what this will look like, although the company says there's a way to go before it becomes a fully functioning consumer service. With Libra, Facebook becomes their social network and their bank. Local regulations will also have to be obeyed where Libra operates - it's not clear where the currency will launch initially.

"Freedom, justice and money, which is exactly what we're trying to do here", he said.

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Facebook said it hopes Libra will make it easier for the estimated 1.7 billion unbanked adults worldwide to access banking services and transfer money electronically.

In response to criticism Tuesday from USA lawmakers, a Facebook spokeswoman said: "We look forward to responding to lawmakers' questions as this process moves forward".

Worth noting Libra won't be available for use until 2020.

United Kingdom regulators are not yet waving a red flag in front of the Facebook crypto-currency train - but they are making it clear that if it does gather speed they will want to step in.

"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", Waters wrote in an official statement after the announcement of Libra.

Facebook announced Tuesday that it is launching a global financial service based on a new cryptocurrency.

The subsidiary would only share customer data with Facebook or external parties if it had consent, or in "limited cases" where it was necessary, Facebook said. In addition to Facebook and Calibra, there are a number of payment processors in the Libra Association, including MasterCard, Visa, and PayPal.

"Facebook is a thousand times bigger, has massive engagement, and got the largest venture-backed start-ups to join it in creating a global apolitical crypto money". "Libra's design does leverage the blockchain, preserving the privacy of transactions from outsiders peering in, but the facilitation role played by Facebook and other partners leaves the company the ability to penetrate that veil of privacy".

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