Libra criticism and the answer of creators

Colin Baseman

The news that Facebook is getting on board with the crypto community and launching its own cryptocurrency is all over the media. Everybody seems to have an opinion on that and lot of them is critical. Find out why the digital coin brought so much outrage. 

Many crypto-enthusiasts were delighted with the news of the launch of the digital coin Libra and seem to welcome it with open hands. On the other hand, a number of high-ranking politicians and parliamentarians criticized the cryptocurrency. Libra representatives respond to such attacks and accusations. Let's explore the reasons for criticism.

Threat to the monetary sovereignty of States

Bruno Le Maire, who holds the post of Minister of economy and Finance of France, actively promotes the idea of the danger of Libra for the monetary sovereignty of countries. He has repeatedly threatened that he will attempt to block the cryptocurrency in the European Union.

David Marcus, one of Libra's founders and head of Calibra wallet, denied such claims and said that there are no grounds for them. In defense of the coin, he said it would be "backed by a basket of 1-to-1 national currencies." For any Libra unit to exist, there must be an equivalent value in the reserve. The task of cryptocurrency is not to create new money. Marcus noted that this function will be fully performed by sovereign States.

The goal of Libra is to become the best payment network that uses national currencies. According to Marcus, his team intends to implement strict regulatory controls that would be aimed at following the 1:1 enforcement rule. He stressed: "We will continue to cooperate with Central Banks, legislative and regulatory authorities of the countries in order to successfully solve problems in the field of cryptocurrency operations."

Another criticismof Libra

The introduction of a new cryptocurrency could lead to a tightening of Facebook's regulatory scrutiny. The company has been repeatedly criticized for not ensuring the privacy of its users' data. The implementation of its own payment system with its own currency will lead to the fact that the social network will receive information about the structure of users ' expenses.

The US Treasury has raised concerns about the possibility of Libra being used for money laundering. The US Senate has expressed its criticism in questions it sent to Facebook owner Mark Zuckerberg:

  • Will users be able to have consumer protection and maintain privacy?
  • What personal information does the social network collect, including when using cryptocurrency?
  • What consumer financial data does Facebook have?
  • Does Facebook's policy comply with the fair credit reporting Act?
  • Does the social network disclose data about its users? 

Russian authorities did not show particular enthusiasm too. So, state Duma Deputy Anatoly Aksakov said that the cryptocurrency will not receive legal status in Russia. He said about the possibility of buying stablecoin on foreign exchanges, though it will not work on Russian platforms. Libra is likely to be banned as a payment instrument in Russia.

Authorities in many countries are apprehensive about Libra. What to expect from cryptocurrency in the future? Much will depend on the developers and the Facebook team. The worries of the authorities are justified – the coin can become very popular, besides the system itself can have vulnerabilities. On the other hand, Zuckerberg's team has repeatedly proven its professionalism and ability to give people what they need. Our crypto portal has prepared a number of articles about the Libra coin. Why not get more information about it to form an opinion?