Ever since Facebook revealed its cryptocurrency plans with Libra earlier this year, it has faced some serious scrutiny. Last month the social media platform sat in front of a panel of the world’s top central banks to discuss the potential that it may pose in destabilising traditional government banks.
The EU has also weighed in on the situation, posing several questions to Facebook about Libra recently. According to the Financial Times (paywall) the European Commission asked Libra spokespeople about a far-ranging number of topics, including the financial stability and data privacy of the cryptocurrency that the platform aims to launch.
Added to this was how Facebook planned to comply with anti-terrorism financing laws, which has been raised as a potential use of Libra, as well as how the platform aims to handle reserves for the cryptocurrency.
This latest batch of scrutiny comes as the EU looks to determine how Libra would be regulated. This may be a moot point though, as it still remains to be seen if the cryptocurrency would even be permitted to operate in the region.
For us the more interesting element is how countries in Africa and South America will view Libra, especially as it has been billed as a solution for the previously unbanked consumer.
The fact that both regions have not held discussions with Facebook over its cryptocurrency is also concerning, as it would indicate that there is no desire to regulate, or at the very least probe the company’s intentions before Libra officially launches.
While the cryptocurrency has faced some early hurdles, it is by no means dead in the water, with regulation being the likely sticking point for many government officials. Should they receive a clearer idea of how Facebook plans to regulate things, and whether it will comply when prompted to, then the forthcoming financial platform holds a lot of potential.
That said, there are still some lingering questions when it comes to Libra.[Image – CC 0 Pixabay]