Can you imagine the moment when Mark Zuckerberg, Facebook Chief Executive Officer (CEO) announced to release its own cryptocurrency, Libra? The impact of this global size project will significantly shift the world financial system. Until 2019, Facebook currently have 2.41 billion users and it is equivalent to quarter of the total population on Earth.
If Libra received the green light from the US regulators, every Facebook users will be migrated to a new digital financial system through Libra.
However, if we look into it deeper, Libra will be able to bring a new paradigm shift into the financial technology and able to promote digital currencies to be mainstream.
With all these features, why the US regulators are grinding and halting Libra effort?
Libra was introduced as an alternative from Bitcoin and as a stable coin, which will offer stability in its value and backed by US Dollar, Japanese Yen, Singapore Dollar and UK Pound Sterling.
The Obstacles for Libra
Since Libra was announced in 18 June 2019, it encountered the first wall through a letter written by the US lawmakers to Mark Zuckerberg and the Head of Calibra, David Marcus, requesting to comply with a moratorium for the project. The situation became more complicated for Libra since then.
A US Congressmen, Maxine Waters has been vocal with her opinion on Libra, describing it as a risk towards national security, contributes to cybercrime and exploitations, risks in investment, privacy, threatening the financial policies and the global financial stability.
US Fears Its Own Shadows
There is a theory on why US being cautious and hesitant, apart from the potential risks to Dollar, Libra will have 2.4 billion users and might surpass the value of Dollar.
Due to this number, the actions taken by the US regulators might be a way to protect its own currency and put Libra’s plan on hold.
Understanding the situation faced by Libra, it will not be easy for them. To be seen as something that will jeopardize a country’s currency might require them to compromise their original plan. Will Libra prevail?