Maybe our first question entering this subject heading should be: Does anyone else trust a non-profit payment exchange? Let’s see what’s been scouring the internet.
For starters, The Federal Reserve’s own Chairman, Jerome Powell, states that Facebook Libra’s entire system is not the most trustworthy cryptocurrency option on the market today. Many concerns have been brought to our attention, nationally and internationally, with primary focuses on privacy, money laundering, consumer protection, and financial stability. The concern doesn’t stop there, though.
One particular message that’s been communicated to politicians and people alike over the past couple of months is that Libra does not have a single banking partner involved in the project; in fact, their partners consist of companies such as Visa, Mastercard, Spotify, Uber, and Lyft – all companies that are somewhat currently entangled in the cryptocurrency era themselves.
But what’s the big takeaway here?
Calibra, the non-profit foundation heading this entire project, is trying to establish and maintain and trustworthy basis with its customers and users – even though it hasn’t been officially released as of yet. They’re attempting to win people over with their ‘low-cost rates’ and their ability to send, transfer, and donate money with a system that’s as easy as sending a text message to a friend. In these modern times, we do adore and admire the luxury of being able to process a transaction in a nice, fast, orderly fashion, right?
So, what’s the catch?
Democratic Representative Maxine Waters from California brought an interesting statement to the table recently; according to her, the Chair of the House Financial Services Committee, e thinks that work on Facebook’s Libra should be halted until further hearings are held in Congress. European lawmakers seem to agree with Waters. According to her, Facebook’s cryptocurrency plan lacks the framework it needs to sustain protections for their investors, consumers, and the overall economy – which is not a good basis to go off of.
There are many problems associated with Libra – and most of them trail back to the fact that a non-profit organization runs it, therefore a non-profit payment exchange. In fact, a lot of problems would easily be dismissed if Libra was simply operating its programs through a decentralized, public permissions network – or so the lawmakers claim.
We understand the appeal of organizations like Bitcoin and Ethereum – but what do these exchange programs have in common? The government is not involved in its operations, which means that if something goes wrong, regulation will not be put into play, because government officials will not be able to find you without being connected through a money exchange program.
Even David Marcus, a man at the top of the leadership board for Libra, claims that he and his team are ready to allow any user to validate transactions when using the system – just like Bitcoin and Ethereum do.
Is this really the safest way to go? Would you trust a non-profit payment exchange such as this?
All we know is that the next few months leading up to 2020 will be filled with information we may or may not want to know. It’s time to figure out if Facebook is taking a step in the right direction – or are they setting themselves up for a nationwide scare?