Bitcoin Alternative of Facebook Libra is to offer banking services
Home News Bitcoin Alternative of Facebook Libra is not a Bank to offer services
Marcel Knobloch –
The in-house crypto-currency to the Tech-giant Facebook attracted worldwide attention and has already drawn fierce criticism. Libra is many States, a thorn in the eye, because it is in competition with the traditional Fiat currency system. Yesterday the first hearing of Facebook’s in front of American politicians.
David Marcus, Head of the Blockchain and the drivers of the project Libra, declared yesterday that the new platform will not act as a secret shadow banking. In his testimony on Wednesday before the U.S. House Committee on Financial Services, he clarifies the following:
We will not offer banking services.
Marcus describes that the new Calibra platform insured as payment service companies, such as Venmo or PayPal, that no individual customer data is shared with the Libra Association, or Facebook. Facebook was caught last year in a scandal, as the Public came to be that Facebook is mass is supposed to have sold customer data to companies. The privacy on Facebook should be improved, according to statements from their own ranks, but experts in the industry see this critical.
In addition to the concerns in the area of data protection and privacy Marucs not that he regarded Libra as the securities or exchange-traded funds, but may as a commodity/raw material. Representative Ed Perlmutter assured Marcus that he supported the Innovation, but strongly concerned about what reaches the light of day, if the project is implemented in practice, and the “true face” of the project comes to the fore (freely translated):
We all have the same question to you and that is the resistance you feel, because we believe that you are a Bank, but they are not quite like a Bank. And if you are a Bank, we rear them, because we have seen how many people have lost money, where there was no regulation. This is the resistance I feel. I would like to support their Innovation. I would like to support the efficiency, of the you believe you bring to the table. But I don’t want anyone here to get hurt.
Libra is supposed to be a kind of Stablecoin that is bound to a bundle with Fiat currencies and government bonds. Members of the Libra Association Libra investment tokens get their value from the securities of this bundle will receive the “Libra Reserve”. The former Chairman of the Commodity Futures Trading Comission is of the opinion that Libra as a securities should be regulated. Gensler points out that Libra is a conditioning instrument is very similar and therefore so should be treated (freely translated):
As currently proposed, the Libra Reserve, Essentially, a merged investment instrument, it should at least be of the Securities and Exchange Commission (SEC), regulated, with the Libra Association registered as an investment adviser.
Gensler also notes that the actual Libra is a Token part of the same investment vehicle, such as the Libra-Investment-Token and with the same risks is loaded. Therefore, the new project by Facebook, falls under the Bank’s regulations and must be a Bank, regulated and monitored (freely translated):
So there is some basis to consider the Libra Reserve as a Bank or a Bank-like regulation to apply. It should at least be restrictions on the investments of the Libra Reserve, and a ban on the ability of the Libra Reserve, to grant loans or to act as part of the Bank.
Marcus emphasizes in the interview clear that Libra does not want to compete with the Dollar or with state currencies. Overall, the debate that many open questions exist and still needs to be clarified, who monitors Libra as a whole and which institutions should be responsible for this shows. It is regulate due to the time constraints is difficult in such complex projects, accordingly, the impact on the financial system in the world could have. The Libra Coin is to be launched in the first quarter of next year.
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