Facebook libra regulatory concerns

Originally named Libra, the crypto coin was initially planned to be backed by a basket of currencies, but under pressure from regulators narrowed its ambition to assuming the status of a stablecoin, backed one-to-one by US dollars. They are braced for action from regulators, who have shown an increasing interest in stablecoins and other crypto assets of late. They are most concerned about their ability to destabilize the financial system if there is a sudden run on withdrawals. Stablecoins are mainly used in transactions involving other digital currencies, but they have the potential to be used in retail transactions as companies like Visa explore services relating to them.

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Content:

• Facebook-Backed Libra Cryptocurrency Project Is Scaled Back
• Libra cryptocurrency
• Libra: Issues surrounding the announcement of Facebook’s new cryptocurrency
• Facebook-Backed Libra Cryptocurrency Receives Regulatory Scrutiny
• Libra: Challenges for Society
• Facebook Gathers Companies to Back Cryptocurrency Launch
• Facebook’s cryptocurrency and the regulatory challenges ahead
• Facebook’s Libra: A Global Monetary System Governed by Private Corporations?
• Facebook's Libra launch could be delayed to tackle the regulatory concerns

WATCH RELATED VIDEO: Global regulators: Facebook's Libra could risk financial security

Facebook-Backed Libra Cryptocurrency Project Is Scaled Back

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Libra cryptocurrency

In June, Facebook formally announced the cryptocurrency Libra, a decentralized digital currency founded with investments from Facebook and partner companies like Visa, Uber, MasterCard, and PayPal. Is this a cryptocurrency, and what does it mean for Facebook to claim ownership over this? I would consider Libra a cryptocurrency. One of the challenges in the whole blockchain and cryptocurrency space is definitions are somewhat unclear and there are religious wars about what actually counts. When you say fiat, you mean what a country issues? Like the dollar.

Libra: Issues surrounding the announcement of Facebook’s new cryptocurrency

The current online payments market is extremely fragmented. Existing players include the likes of Venmo, Wechat and Alipay. Facebook, with its creation Libra and digital wallet Calibra, seek to produce the first comprehensive, large scale online payments system. Although in its infancy, many regulators appear to be taking what seems to be contradictive positions on the yet to be released virtual currency. After their failings to regulate previous virtual currencies like Bitcoin, many see this as an opportunity to get it right and shape the role such currencies play in the economies of the future. Upon closer inspection, these labels do not reflect the true nature of either and what has been created here appears to be a rather unique product. This article will focus primarily on the cryptocurrency aspect as this is the most important when understanding how to regulate the technology. In order for a virtual currency to be classified as a cryptocurrency, the following criteria must be met:. It should only exist digitally 2. There is no central issuer or regulating authority 3.

Facebook-Backed Libra Cryptocurrency Receives Regulatory Scrutiny

Diem formerly known as Libra was a permissioned blockchain -based stablecoin payment system proposed by the American social media company Meta Platforms. The plan also includes a private currency implemented as a cryptocurrency. The launch was originally planned to be in , [3] [4] but only rudimentary experimental code has been released until the project was abandoned in January The project, currency and transactions would have been managed and cryptographically entrusted to the Diem Association, a membership organization of companies from payment , technology, telecommunication , online marketplace and venture capital , and nonprofits.

Libra: Challenges for Society

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Facebook Gathers Companies to Back Cryptocurrency Launch

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Facebook’s cryptocurrency and the regulatory challenges ahead

The Libra Association, the consortium created by Facebook to oversee all things Libra, has updated its white paper to make some changes. The association is abandoning its original plan to create a global stablecoin directly tied to a basket of fiat currencies and securities. The update confirms a previous report from The Information and represents a concession to regulators. The Libra cryptocurrency was supposed to be a brand new currency that could be easily exchanged using cryptocurrency wallets.

Facebook’s Libra: A Global Monetary System Governed by Private Corporations?

RELATED VIDEO: Libra Looking to Address Legitimate Concerns of Regulators, Facebook's Marcus Says

By Brenna Hughes Neghaiwi. Three months ago, Facebook FB. O announced plans to launch the digital currency in June , in partnership with other members of the Libra Association set up by the U. However the attempt to drag cryptocurrencies into the mainstream has since met with regulatory and political skepticism globally, with France and Germany pledging to block Libra from operating in Europe.

Facebook's Libra launch could be delayed to tackle the regulatory concerns

Primarily as it attempts to address the drawbacks of bitcoin and other cryptocurrencies whose history of wild fluctuations meant that, although they were able to be used as a medium of exchange, they could not be used as a store of value or a unit of account. They, therefore, could not fulfil all the characteristics of money. Nonetheless, for Facebook Libra Global Coin to be that kind of monetary system which is driven by private corporations, it would need to surmount several hurdles. One of its greatest hurdles would be achieving a coordinated global approach that is needed to tackle most of the risks this new currency poses. Users would be able to buy Global Coins by depositing fiat currency with the Libra Association.

A Facebook logo on a stand during the Vivatech startups and innovation fair, in Paris, France, 16 May reissued 18 June US social media giant Facebook announced on 18 June its plans for their cryptocurrency named Libra. It is scheduled to rolled out in Regulators and decision-makers are trying to see whether Libra could be categorised as a virtual currency, a financial instrument or e-money.