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October 2007

This UK Financial Regulator Has a Problem with Facebook’s Libra Coin

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Libra coin

Libra coin

Most individuals in the crypto space have been following the journey of the Libra coin, Facebook’s recently unveiled cryptocurrency. From month-long rumors to the company unveiling it last month to Binance reportedly entering discussions with Facebook over it, the public has long known about Libra coin. And today, July 2, there is even more news about it. But it’s not good.

More News About the Libra Coin

On Tuesday, July 2, The Guardian reported that Christoper Woolard has warned against the Libra coin. Woolard, who is a senior financial regulator in the United Kingdom, said Facebook’s cryptocurrency will come under close scrutiny. Specifically, Woolard explained that “its size and scale will pose questions for society and government.”

It’s not just about the size or scale, however. Despite Facebook hoping to roll out Libra coin by 2020, Woolard believes there are several issues with the virtual currency. For instance, there are potential issues surrounding consumer protection and financial market stability.

Similar to how size is not the only issue with Libra coin, Woolard is also not the only person warning the market about it. Recently, Mark Carney, the Bank of England governor, addressed the cryptocurrency, saying he wouldn’t allow a network that became a platform for criminals.

Are We Surprised?

The world knows about Facebook, just as it does the cryptocurrency industry. And when you think about how successful the industry has been and how successful Facebook has been in the past (minus all that surrounded the 2016 election), it’s reasonable to think the company’s own cryptocurrency would succeed. Or is it?

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According to Woolard, most technology firms are going to receive criticism when entering the financial industry.

“Historically, this may have been a sector that has lived by the mantra of ‘move fast and break things’, but the issues raised here require deep thought and detail. There is a finite amount of learning through failing fast that can be tolerated when consumers are at risk of harm.”

Takeaway

What do you think? Do you agree that Libra coin is going to face scrutiny? Let us know your thoughts in the comments below!

Featured image: PixaBay

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Ripple (XRP) Gains Regulatory Clarity in the UK

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Ripple

Ripple

While cryptocurrencies may have initially started with a revolutionary idea about decentralized financial systems, most cryptos are now looking for ways to enter the mainstream. However, for that to happen, there needs to be regulatory clarity, and once it is achieved, then regulated cryptocurrencies can manage to attract investments from institutional investors.

Over the past months, the regulatory bodies in the United States have expressed skepticism towards cryptocurrencies at large and even the President urged Facebook to apply for a bank license if it wanted to launch its cryptocurrency Libra.

Bullish for Ripple

However, it seems that across the pond in the United Kingdom, things are far more welcoming for cryptos. It has now emerged that in addition to Bitcoin and Ethereum, Ripple (XRP) has got regulatory clarify from the concerned body in the UK.

The Financial Conduct Authority is now in charge of the whole process, and according to reports, it has been revealed that Ripple’s XRP is going to be classified as a utility token. It goes without saying that this would be a significant development for the crypto sphere since the classification of a security token could spell doomsday for the cryptocurrency in question. The news has been revealed by the Head of Government Relations at Ripple Michelle Bond.

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In the last published report by the Financial Conduct Authority, the British regulator classified XRP as a utility token. It is important to note that had it been declared a security token, then the token would have come under more regulatory scrutiny and that would definitely have resulted in a sell-off from the current holders.

XRP has long been the crypto with the third-biggest market cap, and over the course of the past few years, Ripple has struck up important partnerships by way of which the crypto was tested. It will be interesting to see how the price of XRP reacts to this significant piece of news.

Featured image: DepositPhotos © adriantoday

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Facebook Coin | Platform will Announce Cryptocurrency in June

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Facebook Coin

Facebook Coin

According to CNBC, Facebook will announce its cryptocurrency later in June. Further, those working on the project will be able to take their salary in its new currency—the Facebook coin.

Let’s check this out; here’s what we know.

Facebook Coin: To Be Announced in Late June

Rumors have surfaced for months now about Facebook’s new digital asset; however, nothing was ever truly confirmed. What is known is this:

  • Almost one year ago, Facebook hired former PayPal executive David Marcus to explore blockchain opportunities—blockchain is, of course, the necessary technology to develop a cryptocurrency.
  • From there, several outlets reported that the social media giant was secretly building its own digital currency for use on its Facebook Apps—Messenger and WhatsApp.
  • Further, rumors suggested that the company was even building its own ATMs where users could buy this cryptocurrency.

Whether or not the company will release official details over its new Facebook coin remains to be seen, but a report from The Information says that it will.

CryptoBank

With more than 2 billion users on the platform, a Facebook coin would turn Facebook into a cryptocurrency “bank.” The buying and selling of things, as well as the exchanging of money between countries, would help the company move beyond advertising revenue, which currently accounts for nearly all of its capital.

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Also, it would get critics off its back for its controversial ad model. The company is often at the mercy of hefty criticism that includes the invasion of privacy, its misuse of data collection and storage, and the abusing of users details.

CEO Mark Zuckerberg has helped the rumors to flourish. Recently in a conference for developers, he highlighted payments as an important area for the company.

However, both operating chief Sheryl Sandberg and CFO David Wehner are “skeptical of the initiative internally,” according to The Information.

Facebook will reportedly look for third-party organizations to act as “nodes” in order to manage the scale of the cryptocurrency. If chosen, the third-party would be charged $10 million for the privilege.

What do you think of the Facebook coin? Is it something you would use?

Featured Image: DepositPhotos © grinvalds

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Mark Zuckerberg to Testify Before Congress Over Libra

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Libra

Libra

Facebook CEO Mark Zuckerberg will defend the proposed Libra cryptocurrency in a testimony before the House Financial Services Committee on October 23.

The highly scrutinized proposed cryptocurrency, which is being led by Facebook (NASDAQ:FB), has come under fire from regulators on both sides of the Atlantic due to its potential threat to monetary sovereignty. Now, Zuckerberg must defend the plans before US lawmakers for a third time when he speaks at a hearing entitled “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors.” Previously, Libra had been debated during meetings of the House Financial Services Committee and the Senate Banking Committee in July.

The committee is chaired by Maxine Waters, a Democrat from California, who drafted the “Keep Big Tech Out of Finance Act,” which aims to prevent online platforms with an annual revenue of at least $25 billion USD from either becoming or affiliating with financial institutions, as well as preventing them from issuing their own cryptocurrencies. While this bill is clearly targetted at Libra, analysts have been critical of the more far-reaching effects it may have. Arcata described it as a “knee-jerk reaction to Libra [that] could have an impact on blockchain adoption more generally.”

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Libra has been a hot topic of conversation in Europe as well. Valdis Dombrovskis, who has recently been appointed Executive Vice President of the European Commission, said in his bid for that role that the EU needs to take a common approach towards designing regulations for cryptocurrency. He singled out Libra in particular, saying “for instance, Europe needs a common approach on crypto-assets, such as Libra. I intend to propose new legislation on this.”

Libra was dealt another major blow today after eBay, Stripe, and Mastercard all withdrew from The Libra Association, the consortium of businesses backing the project. Their withdrawal comes just days after PayPal backed out of the project, adding further doubt as to whether the project will ever come to fruition.

Featured Image: DepositPhotos © BiancoBlue

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