Facebook CEO Mark Zuckerberg said plans to launch a global payment system would remain delayed until US regulators agreed. Comments ending speculation on Libra coins can be aired in countries where there is no government back pressure.
“… Even though the Libra Association is independent, and we don’t control it, I want it to be clear: Facebook will not be part of the launch of the Libra payment system anywhere in the world until US regulators approve it,” Zuckerberg said. in his statement.
Earlier this month, more than half a dozen members of the Association, including PayPal, Visa, Mastercard, eBay, and Stripe, withdrew support for the project and opened group arrangements, increased, and deadlines for formalizing, commitment, getting closer.
The Libra Cryptocurrency and its Calibra online wallet have been scheduled to launch in 2020, but US regulators believe too little is known about digital money and its potential to allow money laundering, know-your-customer rules, and can threaten user privacy. French and German regulators also said they would not allow Libra to be launched within their borders because it could threaten the value of the Euro and illegally privatize money.
This is not the first time cryptocurrency has been challenged by governments around the world. Last year, the Reserve Bank of India (RBI), the country’s central bank, announced a ban on the use of Bitcoin and other digital money by any financial entity that was regulated because of the risks associated with it. China has also banned the use of some cryptocurrency, while also planning to launch its own digital money.
Gartner’s Vice President of Research Avivah Litan believes big banks like JPMorgan Chase are behind efforts to pressure credit card companies and others to exit the Libra project.
“There is a lot of lobbying done to Libra. They clearly face problems from Congress – from Democratic senators who write letters threatening these companies to back down – and in my opinion they are lobbying to do that by large bank credit card issuers. who feel threatened by this, “said Litan.
In September, the Federal Reserve asked some of the country’s biggest banks what they thought of Libra; they answered saying it could win the U.S. financial system by creating a ‘shadow banking’ system.
Libra Coins will be managed by the Libra Association, a separate entity from Facebook consisting of financial services companies, Fintech companies, retailers and even travel sharing companies such as Lyft, as well as non-profits. When Facebook initially announced the Calibra digital cryptocurrency plan and wallet in June, it had 27 supporters.
“… Even though the Libra Association is independent, and we don’t control it, I want to be clear: Facebook will not be part of the launch of the Libra payment system anywhere in the world until US regulators approve it,” Zuckerberg said. in his statement.
In a separate statement after their department, eBay and payment software provider Stripe said they “respect” or “support” the vision of the Libra Association.
“However, eBay has made the decision not to move forward as a founding member. At present, we are focused on launching the eBay managed payment experience for our customers,” the company said.
All members of the Libra Association are expected to accept Libra as a form of payment, but companies such as Visa and MasterCard will also convert the national fiat currency to Libra and back again.
In a speech to the committee, Zuckerberg said people should not be discriminated against on Facebook, and now have a policy of preventing hate speech and removing dangerous content.
Facebook also needs to do more to overcome diversity among its employees, the most pressing of its leadership, who are under-represented by people of color, and women in technical and business roles, Zuckerberg said.
Libra and other cryptocurrency supported by fiat currencies, such as JPMCoin, have the potential to serve large populations in developing countries without access to banking services.
Globally, 1.7 billion adults or 30% of the world’s population still do not have bank accounts, but two-thirds of them have cellphones that can help them access financial services, according to a 2018 report from the World Bank.
The highest rate of global economic growth in the next 50 years will come from Africa, where cellular money has pushed for higher levels of financial inclusion in the Sub-Saharan region, according to the World Bank.
Pushback by regulators and legislators on cryptocurrency does have the potential to leave the US and Europe lagging behind in financial development worldwide, Litan said.