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Facebook's Libra: What the US Regulators want to know!

Facebook's Libra: What the US Regulators want to know!

. 4 min read

As Facebook’s Libra is coming to town, lawmakers show no hesitation in examining this new cryptocurrency.

The Overview On Facebook’s Libra

After getting the news of Facebook’s Libra, the US House Financial Services Committee has immediately arranged a hearing on July 17. The fact that this announcement was made only one day after the Senate Banking Committee interview showed us the impact of this cryptocurrency.

Domestic and global politicians also expressed their suspicion about the plan of this upcoming Facebook’s Libra. However, the company confirms that Libra will not harm the financial system of the US.

According to them, this cryptocurrency will be in the hands of an independent nonprofit organization. They firmly believe that Libra will soon become a universal digital currency. Yes, we’re about to witness changes in the payment system, and as a result, improvements in financial inclusion.

Facebook's Libra is going to change the financial system?
Facebook’s Libra is going to change the financial system?

However, US regulators still cast doubts in these statements; therefore, they want to know the potential impacts of Libra on the American financial system. And when mentioning “the financial system,” they mean both the consumers and the investors.

Maxine Waters, a California Democrat, who chairs the House Financial Services Committee, also shared her thoughts. Just one day after Facebook announcing the plan of Libra, she required the tech giant to stop its actions. She believes that only after the regulators have their final decisions can Libra be carried on.

The Reaction Of Regulators Towards Facebook’s Libra

According to Reuters, on Tuesday, Waters stated that she is writing a letter asking others to support for her call above and freeze Libra.

Pete’s Tweets about Maxine’s actions

Waters’ not only the one who feels unsure about this movement of Facebook. In the Republican party, Patrick McHenry from North Carolina also requested a hearing on Libra. Yes, we cannot ignore the potential benefits this cryptocurrency can bring back. It promises to improve our financial inclusion and fasten payments.

According to McHenry, in the developing world, we have many open questions. It’s fine to be doubtful, especially at this kind of scope and scale. However, one thing is for sure: We’re all looking forward to seeing Libra conforming and convincing our lawmakers.

Details On Facebook’s Libra’s 1st Hearing

Launched in early 2020, many predict Libra will soon appear in the list of top 5 best cryptocurrencies worldwide. Owing to 2.4-billion-position Facebook’s global audience, the widespread adoption of Facebook’s Libra is inevitable.

Facebook mining users' data issues
Facebook mining users’ data issues

That’s also the reason why the regulators are interested in this new cryptocurrency. According to official announcements, the hearing of the Senate banking committee will discuss only the data privacy concerns. It’s quite reasonable due to Facebook’s current accusation on stealing users’ data. And we all know how hot that topic is in Silicon Valley.

Because of the long-time Facebook’s user data and privacy scandals, lawmakers feel unsure how it can handle users’ financial information.

How Facebook Replied

Facing the concerns of regulators, Facebook showed no hesitation in responding. They revealed their solution to this issue by introducing a new department – Calibra. According to the company, Calibra will be a separate section of the company working to protect customers’ privacy. They will also play the leading role in making applications for Libra.

Facebook's Calibra
Facebook’s Calibra

Facebook also confirmed that the company wouldn’t take advantages of their customers’ financial data to make money from advertising. However, the committees haven’t given out their final decision. According to them, they will run a test at the other hearing; yet, we have no ideas about the one who will examine Libra.

To sum it up,

While many users are curious with the fate of Libra, Facebook announced that it is trying its best working with global regulators. The company also reassured that it’s ready to answer any questions of lawmakers on the rollout of Libra.

Jerome Powell's comments on Facebook's Libra
Jerome Powell’s comments on Facebook’s Libra

At last week’s press conference, Jerome Powell, Federal Reserve Chairman, also revealed some new information. According to him, Facebook has discussed a lot with the agency about Libra’s plan. He felt “not too concerned” about the influences of cryptocurrencies on central banks.

For some, the hearings of the House and Senate act as a move to furthermore understand about the cryptocurrency market. They believe that through the knowledge about Libra, lawmakers can impose better rules on cryptocurrency. We can deny the fact that this has been an unregulated market in the past decade.

Fintech Revolution
Fintech Revolution

The House Financial Services Committee interview on Libra will also take place on Tuesday afternoon. The main concern of this hearing will be about the fintech revolution’s regulation both within and outside the United States.