Fears surrounding the launch of Libra and the threat it may pose in the future.
Mark Zuckerberg and his company created a new cryptocurrency, Libra early this year, and it is set to lunch in 2020. This crypto is intended to help people save, send, and receive money as quickly as sending a text, but the Democrats demand an immediate halt to this cryptocurrency based on it posing a serious risk to the current financial system. A letter was sent to the CEO Mark Zuckerberg detailing how they fear the launch of this cryptocurrency will cause severe problems for the already established financial system in America, and they asked that it be postponed until regulators can investigate the risks involved fully.
Committee chairwoman Maxine Waters wrote that “if products and services like this are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger the US and global financial stability”. She explained further by stating how these vulnerabilities could be exploited and obscured by bad people as other cryptocurrencies, exchanges and wallets have been in the past.
The letter went further to claim that investors, bitcoin casinos, and consumers that were transacting in Libra may be exposed to severe national security and privacy concerns. A few other fears such as cybersecurity risks, and trading risks were also mentioned. The letter explained how they feared that those using Libra would become easy and unique targets for hackers.
The group of lawmakers earlier on had hinted that they were going to conduct investigations in Facebook’s new cryptocurrency, which was seconded by 27 prominent companies like Uber, Spotify, PayPal, master card, and visa.
Facebook, in their response, said it had announced the launching of Libra this far ahead of its launch so that it can have enough time to address all these concerns that were arising and make the necessary adjustments. A company spokesman said the Independent “we look forward to responding to policymakers’ questions as this process moves forward.” However, the issues surrounding Libra isn’t just with the democrats, other officials have also raised concerns about its use.
The French finance minister, minister Bruno Le Maire, has also come out to warn about the treats Libra poses. He warns that strict regulations should be placed on it to prevent it from being used as a tool for financing terrorism and money laundering. Le Maire told Europe radio 1 that it was out of the question that Libra be allowed to become a sovereign currency and he cautioned that it couldn’t and must not happen.
There are other reasons why Libra is not welcomed with open arms. A cryptocurrency expert Phil Chen has also expressed concerns that Libra can be used as a tool to further Facebook’s access to people’s personal data. He says “if you are concerned with Facebook having too much access to your private data, Libra will give facebook even more direct access to your financial information” it is not just direct access to your information, but you will be opening up to direct access to your wealth and capital. A critic comes out also to say that Facebook’s Libra is the “most invasive and dangerous form of surveillance ever designed.”
US senator attacks Facebook saying that Facebook has no answer to the accusations it values and calls it a flagrant display of bulls***. Facebook’s new currency is receiving a lot of heat as some people fear it’s the most invasive and dangerous form of surveillance, while some other people fear it may replace the dollars. At this point, it is safe to say that the future of Libra is unknown, and it appears to be quite bleak.
Once Libra is launched, it will allow users of all of Facebook’s affiliate companies (WhatsApp and messenger) send and receive digital tokens.
The technology used in Libra claims that it will give more than 2billion users who aren’t under the services of any traditional bank and financial organization access to financial services across the world. Libra will make it easier for money to be transferred from one user to another as fast as delivering a text around the globe. Although this could be very advantageous, it could also serve as a severe threat, especially when it isn’t adequately supervised.