Occupying the majority of regulators’ time in countries around the world, Facebook’s Libra stablecoin doesn’t appear to be getting any closer to finding a viable solution. Facebook CEO Mark Zuckerberg is desperately trying to convince lawmakers that Libra has merit, while the company is looking at the possible end to banking relationships if it decides to officially launch the cryptocurrency alternative.
Zuckerberg gave written testimony (in pdf) ahead of his appearance before the U.S. House of Representatives’ Committee On Financial Services this week, where he attempted to assuage fears of what Libra means to global finance and commerce. He started out by showing why Libra is needed, explaining, “There are more than a billion people around the world who don’t have access to a bank account, but could through mobile phones if the right system existed. This includes 14 million people here in the U.S. Being shut out of the financial system has real consequences for people’s lives—and it’s often the most disadvantaged people who pay the highest price. People pay far too high a cost—and have to wait far too long—to send money home to their families abroad. The current system is failing them. The financial industry is stagnant and there is no digital financial architecture to support the innovation we need. I believe this problem can be solved, and Libra can help.”
There is legitimacy to his position, but the general opinion is that Facebook isn’t the company that needs to lead the charge. Libra has already been delayed a couple of times and is currently looking at a quasi-permanent suspension until all issues are addressed. Zuckerberg adds that Libra won’t be introduced until U.S. regulators are completely on board with the project, which could take a while, given the country’s consistent reticence to embrace the Bitcoin ecosystem.
Elsewhere, Facebook is going to have to appeal to the money interests of its big banking partners and force them to not think with their heart. According to the Financial Times, the CEO of financial institution ING, Ralph Hamers, has jumped the gun and is ready to pull the plug on any relationship between the social media giant and the banks if it moves forward with Libra.
He told the media outlet that Libra can be used for money laundering and that it would facilitate “financial… crime” and that the bank would “take measures and exit the client, or not accept the client.” He added, “We are such a large, regulated institution that you don’t want to risk anything,” said Hamers. “We’ve said we’ll take a look and see how this develops.”
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