Facebook's libra has succeeded in one thing. Grabbing the attention of the government agencies who were sleeping at the wheel when it comes to cryptocurrency regulations.
All of a sudden, authorities took notice and realized that blockchain and crypto are no longer a make-believe game of garage nerds, it is a real thing and if governments do not formulate clear guidance - it could threaten very fabric of Fiat system.
While the knee-jerk reaction from the authorities at these new developments might cause initial bumps for the crypto space as a whole, in the long-term, having clear guidance will help more legitimate players to join the revolution that is blockchain.
Facebook may not have seen this coming
It is interesting to note that while Facebook's entry will expedite the regulatory framework, it may not bid well for Facebook. First, governments go to greath lengths to protect their fiat regime.
Can you imagine a government without fiat? It is literally impossible.
Government controls the money supply so that they can pay for public services, security and everything. If a company like Facebook swoops in to take over the 'money business' from the government, it will face a great adversary.
These governments and their crooked politicians never cared for public's interests. This is a fact. If they did, we would have seen strict action against Goldman Sachs that made money on middle class misery in 2008, but we know all too well that governments don't give a rats poop for people.
They are content collecting taxes and fines to keep the status quo of protecting the wealthy and screwing the working class.
Blockchain and Cryptocurrencies could change this status quo. Suddenly, the control of money could be swayed away from the greedy and inefficient bodies and into the hands of public. That is the greatest threat, greater than nuclear, from the authorities point of view.
What grounds could be used against Facebook?
Good news for the authorities is that they don't have to go searching for a case against Facebook. They have a long list of things that could be used against Facebook which they so far have not because Facebook paid its dues.
For instance, any and all of the below could be used against Facebook to curb its Libra in the bud:
- Privacy breaches
- Fake accounts and their proliferation to propogate agendas
- Use of Facebook in the United States election
- Cambridge Analytica
- Calibra's incorporation in Switzerland and when the company tries to operate its Libra in a country like US or India, it could be banned
- Banking regulations
- FINRA regulations
- SEC regulations
- FinCEN disclosures and identity management
- GDPR, right to forget
- Procedures around Court summons and subpoenas
- IRS reporting requirements
- Cross border financial transaction issues
Facebook's declaration could have been premature
As a company, Facebook would have thought about all of the above aspects, however, it is unclear that they have a clear framework to tackle each and every intricacy associated with the partial list of issues above.
Facebook wanted to get in on the blockchain and crypto frenzy before others did, however, that haste could prove costly. It would be interesting to see how Facebook's launch in 2020 transpires and how it paves the road for other big players to enter into the space.
