The crypto currency markets experienced a deluge of new information in 2019. Some of the most compelling news can from Facebook’s controversial cryptocurrency Libra which generated concern from monetary authorities. Regulators from around the world have issues with a Facebook generated cryptocurrency, which led to a slowing of the process in an attempt to define the potential impact on the global financial system.
Facebook’s Introduction of Libra
Regulators quickly responded when Facebook first announced its plans to enter the payments realm with the launch of Libra in 2019. Following the announcement, it did not take long for regulators and central banks to issue warnings about Libra ‘s potential impact. This spooked some of Facebooks original backers, which had support from 28-companies including Visa, MasterCard, and PayPal. Although Facebook is clearly set on launching Libra in 2020, it’s impossible to know when.
What is Libra?
Facebook plans to introduce a global cryptocurrency where transaction will traded via apps created by Facebook such as Whatsapp and Messenger. The platform will be powered by a new Facebook-created version of blockchain, which has encrypted technology used by bitcoin and other cryptocurrencies.
The goal is not to have Facebook fully control Libra. Instead get just a single vote in its governance like other founding members. The founding group agrees to promote the open-sourced Libra Blockchain and developer platform and accept Libra for payment. The price will also be anchored which removes some of the unwanted volatility that payment processors would experience by using an alternative cryptocurrency such as Bitcoin or Ethereum. The volatility in the non-anchored cryptocurrency space make these coins more attractive for cryptocurrency trading in India with app twitter.
What is Attractive About Libra for Facebook?
Facebook sees an opportunity to provide a platform, like Paypal for the cryptocurrency space. This would allow them to market a financial services alternative to the 1.7 billion people who lack a bank account.
When Will Libra Launch?
Facebook presented a white paper about the cryptocurrency Libra’s in June of 2019, which prompted worldwide objections to the project. Regulators said that the cryptocurrency not only poses risk to financial stability as the cryptocurrency could be used in financial crimes, but it’s also a threat to sovereign currencies.
CEO and Chairman Mark Zuckerberg said that said that Facebook is now taking a more cautious approach when bringing forward projects like Libra that are sensitive allowing a period for consultation and which would allow the country to work through issues. Zuckerberg believes there is a need for this product. He wrote in a post that Libra would be a game-changer for the public, because existing money networks are closed and are not well interconnected. He said that Libra, will enable value to be moved around the world at in real-time and at an incredibly low cost.
While the concept of a anchored cryptocurrency such as Libra is very attractive for payment processing, regulators are still worried that allowing Facebook to offer payment processing through its apps will lead to a breading ground for unscrupulous activity which has kept the launch on the sidelines for the foreseeable future.