Prior to launch, Facebook's Libra is already making waves. With cryptocurrency, Facebook (FB) seeks to offer a more efficient, affordable and secure payment tool. However, ours are facing setbacks from regulators in the US and China.
Facebook extending its empire to the cryptocurrency sector does not come as a surprise – it highlights the company's pressure for new opportunities amid rising demand for digital payments. Furthermore, the cryptocurrency market is booming thanks to specialist transactions and cross-border refinancing. Transparent market research expects the global cryptocurrency market to grow by a spectacular 31.3% compounded annually between 2017 and 2025. from Day “src =” https://marketrealist.imgix.net/uploads/2019/08/5.jpg?auto=format “title =”
Why is Facebook launching Libra?
The Libra, with a support of more than 2 billion Facebook users, will surely be a success. It is also supported by Visa (V), PayPal (PYPL) and Lyft (LYFT), which play a key role in the collection of financial data and simplify transactions with their payment network.
The fact that almost half of the world's adults do not have active bank accounts provides a unique opportunity for Facebook. Consequently, Libra promises to be a game changer in areas where people do not have access to banking services. The tech giant has already unveiled Calibra, which will serve as a digital wallet for Libra. Powered by blockchain, the digital wallet would allow people to send Weight to anyone with a smartphone. Ultimately, the cryptocurrency goal would be to make it easy for people and businesses to pay bills, buy goods, and send money.
Why Facebook Weight may not see the light of day
Despite the benefits of taking the Weight, there is a chance that it may not see the light of day. Rising regulatory pressures pose a significant threat to the ambitious project. US committee leader Maxine Waters wants Facebook to move forward slowly with the Libra ambitions and wait for appropriate cryptocurrency regulations to be in place.
However, regulators have failed to come up with any specific regulations, making it unclear whether Facebook will be able to address all of their concerns. As it stands, the lack of regulations raises serious doubts that Facebook's Weight will come to life in 2020.
Lawmakers aren't the only ones opposed to Weight. US Treasury Secretary Steven Mnuchin has pointed out that money launderers and terrorists can abuse Facebook's cryptocurrency. Federal Reserve leader Jerome Powell has reiterated these concerns, suggesting that Libra may be laundering money because of its decentralization.
Mark Cuban on Facebook's crypto
Sharing similar sentiments is billionaire investor Mark Cuban, who insists that Facebook's cryptocurrency is a big mistake. According to Cuban, Libra could disrupt unstable land.
The United States also views Facebook's cryptocurrency as a threat to national security. While the country currently has veto power over global financial transactions, increased use of cryptocurrency may reduce the US dollar's preference as a legal tender in world trade.
China's Concerns for Facebook's Libra
China would not be impressed that Facebook's Libra took over mobile payments, either. For the longest time, the country has been trying to replace the US dollar with the Chinese yuan as the preferred means of global trade. Facebooks Libra can complicate matters even more.
Facebook, which makes a good number of its 2.4 billion users to Watchmen, will surely disrupt the payment area. As it stands, Alibaba (BABA) Alipay and Tencent (TCEHY) WeChat account for a large number of mobile payments in China. However, given the decentralized nature of the waves, many people can switch to cryptocurrency.