A G7 special task force is being deployed to look into the details of Libra, the new cryptocurrency developed by Facebook, Reuters reports.
As expected, the task force will take a cursory look into Libra and its operation, while also working to develop regulatory guidelines for other cryptocurrencies. France is spearheading this offensive, which would look into the risks of Facebook’s unchecked expansion into cryptocurrency.
Per the report, Villeroy de Galhau, the Governor of the Central Bank of France, said, “We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.”
The report also revealed that the new task force would be headed by Benoit Coeure, a French economist and policy advocate who has been on the Executive Board of the European Central Bank since 2011.
Mixed reviews following Libra
The launch of Libra’s whitepaper on Wednesday was met with much fanfare, with notable names in the crypto industry heralding it as a new dawn in the asset space. Erik Voorhees, CEO of crypto exchange ShapeShift, took to his Twitter account to analyze the currency and its nuances.
In a Twitter thread, he pointed out, “Libra will serve the mass market, and be the single largest bridge toward decentralized finance that has ever been built. Prior to this, the largest bridge was Coinbase, which has played an integral role in crypto’s rise.” Jerome Powell, the Head of the United States Federal Reserve, also praised the currency, asserting that while there are risks to it, the currency does pose potential benefits as well.
However, as expected, the currency has also been met with its fair share of criticism. Many are worried about Facebook’s choice to peg the stablecoin’s price to unconventional assets (bank deposits and short-term government-issued securities), while concerns have also been raised concerning how the asset plans to comply with global Anti-Money Laundering (AML) standards.
Yesterday, Rep. Maxine Waters (D-CA), the Head of the U.S. Congress Committee on Financial Services, called for the social media giant to halt the development of the asset.
In a statement, the Congresswoman said, “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.”
Can Facebook Scale These Hurdles?
As it stands, the U.S. Senate Committee on Banking, Housing, and Urban Affairs have set a July 6 hearing for the social media giant’s currency.
Per a report by MarketWatch, the hearing has been titled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations.” It would include testimonies about the crypto, giving legislators a first-hand view of the project and whether the asset is secure enough to operate within the country.
It certainly does not help that Facebook has had data breach issues in the past, and it is not exactly a secret that the company sells user data to third parties for ad purposes.
The social network company is not blind to these stumbling blocks in its pre-launch process. Despite confirming a 2020 release for its Libra app ‘Calibra’, Facebook COO Sheryl Sandberg has stated that the crypto’s launch will totally depend on regulatory approval.