Just when you begin to wonder if Facebook has managed to put the last few months of scrutiny behind them, another ‘worm’ comes out of the woodwork to make things all the more difficult for Mark Zuckerberg and the directors of 27 other top businesses involved in the Libra Foundation.
In June, Facebook announced that they, together with 27 other big names in the retail, fin-tech, and service industries, were planning to release a new global currency system (Libra) that would be based on blockchain technology, but with a central reserve managed in equal shares by the 28 companies involved.
The only positive thing that has happened as a result of their announcement, was the fact that the values in leading cryptocurrencies, like Bitcoin, rallied against the news. All other outcomes have been highly stressful for the conglomerate of companies.
The US senate raised concerns about the trustworthiness of Facebook after they accused Facebook of the fact that they are not trustworthy when it comes to safeguarding user’s data. It sparked serious questions of how exactly they planned to manage a full-on banking system when they were not even able to secure customer’s accounts on a social media platform.
Alongside pressure from the USA, the European Union has voiced concerns over the fact that a project of this magnitude may be unfair to other industries and would undoubtedly produce a monopoly market.
But Europe is not finished, as France has picked up the proverbial loudhailer and are taking a big stand in opposition.
THE FRENCH RALLY THE REST
While countries like the United Kingdom have shown a little concern with the plans for this stablecoin, the French have stood in outright defiance of the initiative, having been the leaders in the creation of the G7 task force that was called together to study the impact of cryptocurrencies and stable coin currencies and come up with a favourable way to regulate them sufficiently.
The other day, the French economic minister, Bruno Le Maire declared that he and his government intended to block the development of Libra in Europe on the grounds that it poses a massive risk to financial security and stability on the continent. He believes strongly that the monetary value of the Euro is at stake, as well as the financial wellbeing of millions of European citizens, who might be tempted to invest into a currency that may capitulate at the first sign of stress.
Le Maire has been quoted for saying that, “Any failure in the functioning of this currency (Libra), in the managing of its reserves, could create considerable financial disorder.”
As a result, Le Maire and his constituents are pushing hard to veto the chance of Facebook trading in Libra currency on European soil.
WHAT HAPPENS IF FRANCE MANAGE TO TURN EUROPE AGAINST LIBRA?
Facebook and the rest of its partners would be hit extremely hard by a ban in Europe. It would constitute as one more closed door in a first world jurisdiction.
The USA seems to be adamant on a ban on their soil, India is shut tight (area with most Facebook users in the world), China is developing their own coin and are in direct competition with Libra, and now Europe may shut the door. That would only leave Africa, South America, Canada, Australasia, and possible parts of Asia where Sharia Law does not abound. The biggest economies in the world would be all shut out.
While this may not be the best news for Libra and stable coin concepts, it is definitely good news for Bitcoin and pure cryptocurrency, who are decentralised and above political manipulation. While Facebook would have to concentrate elsewhere, the growth of Bitcoin in these first world countries may just rise, as the public call for digital money as a hedge against over-inflated economies is sure to peak.
Already Bitcoin seems to be the ‘flavour of the year’ amongst top tech companies. As it becomes more and more popular, it is sure to become more usable and as a result, more stable as a currency. This year alone has shown the resilience of the platform and proves to the world that when the powers are taken out of the hands of the corrupt and given to private citizens, there is hope.
As hard as governments may try, the blockchain will survive. While good regulation may be a needed factor in the industry, it must never be allowed to manipulate the digital economy.
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