Facebook X (Twitter) LinkedIn Telegram
    • About
    • Advertise
    • Submit Press Release
    • Contact
    Facebook X (Twitter) LinkedIn Telegram
    BlockonomiBlockonomi
    • Prices
      • All Coins
      • Bitcoin Price
      • Ethereum Price
      • Ripple Price
      • EOS Price
      • Litecoin Price
      • Monero Price
      • Binance Coin Price
      • Bitcoin Cash Price
      • Chainlink Price
      • Cardano Price
      • Stellar Price
      • Tron Price
    • Sections
      • All
      • Analysis
      • Bitcoin
      • Ethereum
      • Education
      • Trading
      • Buying
      • DeFi
      • NFTs
      • Metaverse
      • Exchanges
      • Brokers
      • Guides
      • Gaming
      • Privacy
      • Business
      • Finance
      • Fintech
      • Regulation
      • Security
    • Claim Free Crypto!
    • Gamble With Crypto!
    • Easily Buy Crypto!
    Home / About / Advertise / Submit Press Release
    BlockonomiBlockonomi
    News

    Facebook Libra a Security? The Verdict Is Still Out in the U.S.

    William M. PeasterBy William M. PeasterNovember 21, 2019No Comments4 Mins Read
    Telegram Twitter LinkedIn WhatsApp Facebook Email
    Facebook Libra
    Share
    Facebook Twitter LinkedIn Email Telegram WhatsApp

    Stablecoin projects have typically been considered de facto currencies by many stakeholders in America’s nook of the cryptoverse, but that hasn’t stopped some officials from recently asserting that Facebook’s Libra stablecoin should be characterized as a security.

    Now, U.S. Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert has waded into the discussion, noting in new remarks that the Libra is structured in an entirely different way than bitcoin (BTC), which the Commission considers to be a commodity in no uncertain terms.

    Facebook Libra

    The takeaway here, then?

    Chairman Tarbert has suggested publicly for the first time that Libra’s backers will not be able to lean on bitcoin’s design in arguing Libra is a vaguely similar commodity. Accordingly, it’s still an open question — at least for Tarbert — as to what Libra will legally be when it actualizes, though the asset’s path to becoming a commodity may be murkier than its path to becoming a security.

    “We Know How Bitcoin Works”

    Table of Contents

    • “We Know How Bitcoin Works”
    • The Elephant in the Room

    In an appearance on CNBC this week, the CFTC Chairman specifically contrasted the Libra and bitcoin, saying that the main crux of the legal uncertainty around the Facebook-backed stablecoin project is that it still remains to be seen how precisely the Libra will function.

    To that end, Chairman Tarbert said:

    “[Bitcoin and Libra] are fundamentally different products … and I think we also know how bitcoin works, as you say it’s been around for 10 years. So we have a very good idea how it works, and we’re able to classify that not as a security but as a commodity, whereas Libra is developing and there are a bunch of unanswered questions — and also the way that it’s structured, linking it directly to a set of national currencies — a very different product.”

    With that said, it will be incumbent on Tarbert and other top regulators in the U.S. to settle on a position as the Libra continues to materialize.

    We already know that the U.S. dollar, the euro, the British pound, the Japanese yen, and the Singapore dollar are the initial currencies poised to comprise the stablecoin’s reserves. What will surely factor largely on regulators’ minds regarding a possible security designation is how much Libra Association members like Facebook will directly benefit from revenues generated by the Libra.

    The Elephant in the Room

    In the Libra project, financial watchdogs across the world have feared that the Facebook-linked project would swoop in with a new world currency and then reap untold profits by coming between central banks and their billions of respective customers.

    Whether such a doomsday scenario is feasible is anyone’s guess. But the mere possibility of it has made some come forward to argue that the Libra stablecoin should by governed as a security and thus face more onerous legal requirements.

    One high-profile figure decidedly in that camp is Gary Gensler, the former head of the CFTC.

    “As currently proposed, the Libra Reserve, in essence, is a pooled investment vehicle that should at a minimum, be regulated by the Securities and Exchange Commission (SEC), with the Libra Association registering as an investment advisor,” Gensler said in testifying before the U.S. Congress earlier this year.

    Others have approached the subject more diplomatically. Back in September during separate congressional testimony, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton declined to take a public position on Libra’s legal status yet.

    “I’m not prepared to make a decision like that here,” Clayton said.

    However, whatever happens next it appears in the least that the Libra Association will have to register as a Money Services Business (MSB) in America. That’s because FinCEN Director Kenneth A. Blanco just said his agency views all stablecoin issuers as money transmitters, which is another key thread to keep watching going forward.

    Advertise Here
    William M. Peaster
    • Website
    • X (Twitter)
    • Instagram
    • LinkedIn

    William M. Peaster is a professional writer and editor who specializes in the Ethereum, Dai, and Bitcoin beats in the cryptoeconomy. He's appeared in Blockonomi, Binance Academy, Bitsonline, and more. He enjoys tracking smart contracts, DAOs, dApps, and the Lightning Network. He's learning Solidity, too! Contact him on Telegram at @wmpeaster

    Related Posts

    EOS Network – An Enterprise-Grade Blockchain Operating System

    November 29, 2023

    Former OneCoin Compliance Chief Pleads Guilty to Fraud and Money Laundering

    November 10, 2023

    After The SBF Verdict, Where Does the Crypto Market Go Next?

    November 4, 2023

    Comments are closed.

    Coinbase Earn
    Advertise Here
    Gambling
    • mBit Casino
      VisitReview
    • BC Game
      VisitReview
    • Duelbits
      VisitReview
    • BitcoinCasino
      VisitReview
    • FortuneJack
      VisitReview
    • 1xBit
      VisitReview
    Exchanges
    • KuCoin
      VisitReview
    • Coinbase
      VisitReview
    • Binance
      VisitReview
    • PrimeXBT
      VisitReview
    Koinly
    Advertise Here
    Trading Bots
    • 3Commas
      VisitReview
    • Cryptohopper
      VisitReview
    • CoinRule
      VisitReview
    3commas Trading Bot
    Advertise Here
    All content on Blockonomi.com is provided solely for informational purposes, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, product, service or investment. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate.
    Blockonomi™ Copyright © 2017 - 2023 Kooc Media Ltd. All rights reserved. Registered Company No.05695741
    Network: Moneycheck - Finance News / Beanstalk - NFT & Metaverse News
    • About
    • Contact
    • Deals
    • Advertise
    • Privacy Policy
    • Terms & Conditions

    Type above and press Enter to search. Press Esc to cancel.