OT: Facebook plans to come out with its own cryptocurrency

Miami, FL (or the nearest big-booty club)

6/18/2019 3:45:57 PM

Democratic Rep. Maxine Waters, chair of the House Financial Services Committee, on Tuesday requested that Facebook pause its development of Libra, an upcoming cryptocurrency that the company plans to release in 2020.

“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 said in a statement on Tuesday.

Facebook and a consortium of partners on Tuesday unveiled Libra, its much-awaited blockchain project that the company has been working on over the past year. Libra is an open-source digital currency that people will be able to use to transfer money to peers or merchants over the internet. Facebook is also introducing a digital wallet, Calibra, for users to store and exchange the currency.

Rep. Patrick McHenry, the ranking Republican on the committee, had requested Waters to call the hearing earlier in the day. “While there is great promise for this new technology in fostering financial inclusion and faster payments, particularly in the developing world, we know there are many open questions as to the scope and scale of the project and how it will conform to our global financial regulatory framework,” he wrote. “We need to go beyond the rumors and speculations and provide a forum to assess this project and its potential unprecedented impact on the financial system.”

Senator Sherrod Brown, a Democrat, also expressed skepticism, tweeting “We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.”

Sen. Mark Warner, a Democrat, echoed the sentiment, saying Facebook is a company that has lost Americans’ trust in its ability to keep their data private.

“The idea that we are going to turn over our financial data and information to that company, I think they have a big uphill effort to try to convince Americans that they ought to trust in Facebook’s proprietary interest in keeping your data secret,” Warner said.

A Facebook spokesperson told CNBC, “We look forward to responding to lawmakers’ questions as this process moves forward.”

https://www.cnbc.com/2019/06/18/rep-maxi…

8 comments

Latest

jackslash

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5 years ago

There's a lot of money to be made in cryptocurrencies--by those who know how to exploit the naive and gullible.

san_jose_guy

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5 years ago

Cryptocurrency is pretty much just like BitCoin, a Ponzi Scheme.

With all that facebook has already done to profit by stimulating the Lizard Brain, at this point i have to say that we don't want them launching any crypto currency., In fact, the sooner we can be rid of facebook, the better.

SJG

Papi_Chulo

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5 years ago

Related Article:

The difference between bitcoin and Facebook’s Libra

The cryptocurrency industry cannot get enough of Libra, touting its ability to gain mainstream adoption which bitcoin strived to do for years.

“Libra is potentially one of the most positive external tailwinds in Bitcoin in its 10-year history,” said Spencer Bogart, of Blockchain Capital to CNBC over email.

However there are differences between bitcoin and Libra and it stems from their use case.

Use-case
Bogart explains that Libra is a medium-of-exchange where users can send money and house transactions. Bitcoin, while it attempted to became a platform for facilitating transactions, has been regarded as more of an investment and store-of-value. Michael Moro of Genesis Capital, among others, still calls bitcoin “digital gold.”

Adoption
Libra is coming to market with a lot of powerful players behind it…including Mastercard, Uber, Booking Holdings, Visa, which Cannacord Genuity says should help Libra achieve mass adoption.

“There’s [a] good opportunity to get a lot of adoption…whereas bitcoin was a grass roots experiment that is still in development,” said Michael Graham, analyst at Canaccord Genuity to CNBC.

Libra’s low fee transaction should incentivize customers to use the token to send money, analysts said. Bitcoin, on the other hand, got more expensive and slower in conducting transactions.

“Libra is meant to be built from the ground up to be fast and inexpensive to transact with…huge difference because it still costs a lot to trade bitcoin, said Graham.

Volatility
The volatile nature of bitcoin has invited risk takers to trade the cryptocurrency.

Since bitcoin is not owned or governed by any central party and lives on a decentralized network, it is vulnerable to bring price swings.

Alternatively, Libra is supported by currencies like the dollar and euro.

“Libra is a stable coin, backed by a basket of currencies and debt securities. Bitcoin is a hypervolatile crypto-currency,” said Tom Lee of Fundstrat Global Advisors to CNBC.

Suntrust analysts say its one reason they like it already over bitcoin.

“Unlike the volatility seen around other cryptocurrency’s in the past, we believe that Libra’s focus on creating a stable, low inflation currency backed by a reserve or real assets is a differentiator. Further, unlike other stablecoins, Libra will not be pegged to one currency but instead a basket of assets ranging from bank deposits to short-term government securities.”

https://www.cnbc.com/2019/06/18/the-diff…

herbtcat

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5 years ago

Maxine is not well informed here. FB doesn't "own" Libra. And the best way to STOP innovation is to let regulators set the rules before the technology is developed. If the technologists waited for regulators (who are hugely funded by big protectionist industries), our phones would still be wired to a wall, our solar panels would not exist, our cameras would still need film, and we would not have satellite or cable TV.

The problem with Waters' request, even if driven by her desire to protect consumers, is that legislators and regulators do not understand that developing new tech requires a balance between risk and reward. Regulations are specifically written to eliminate all risk.

This ship has already sailed. Forcing FB to step away will not stop the development and deployment of this tech. It will only restrict FB from engaging in an are of commerce where they have deep expertise and potential to provide a valuable service to a global economy. Yes they will be one of the providers who can make lots of money. But they also run the risk of losing lots of money as well.

san_jose_guy

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5 years ago

"The cryptocurrency industry cannot get enough of Libra"

That says it right there. We must not let this Libra get going, not if we want our country to have a financial future.

SJG

san_jose_guy

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5 years ago