Facebook is taking all the steps it can to make sure Libra becomes a success. According to Reuters, that involves applying for several regulatory licenses, including New York BitLicense, but putting out hundreds of fires they’ve already started just with their social media business.
Libra, the digital currency that Facebook has announced will likely launch in 2020, will need to please the regulators of hundreds of jurisdictions if its going to try and stay in the good graces of governments around the world. That won’t be easy, said Barry Lynn, executive director of the Open Markets Institute. “It’s a complete disaster from a regulatory perspective,” he said “This is a corporation that’s got fires all over the world with regulators. It’s only going to get worse.”
In applying for a BitLicense, and already discussing more regulatory requirements with other government bodies and regulators, Facebook is trying to get everything cleared before Libra’s eventual launch. “The scrutiny that we’ve seen is something that we expected and welcome,” a Facebook spokesman noted. “We announced this early by design in order to have this discourse in the open and gather feedback.”
Jeff Bandman, a former U.S. Commodities Futures Trading Commission official, noted that a year is plenty of time to work out everything with regulators. That’s true of a handful of regulators for a smaller company, but Facebook will need an entire army of lawyers and specialists to get cleared as globally as they’d like to be.
They also need to answer for many of their past sins, including fake accounts and Russian manipulation of the 2016 U.S. elections. Congresswoman Maxine Waters has already called on Facebook to show up before Congress to explain how it will make Libra a more responsible offering than their social media site has been in the past.
The effort they will need to put in to developing Libra will likely be worth it. Pascal Bouvier, managing partner of MiddleGame Ventures, said, ““I would say the risks are commensurate with the returns – potentially huge.”
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