Facebook’s ‘crypto’ project faces more international hurdles

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If Mark Zuckerberg and Facebook thought that the world would embrace its Libra stablecoin without hesitation, they were completely wrong. The U.S. has already stated that it wants Facebook to hold off on the project and is requesting that the company’s executives attend a hearing in Washington, D.C. to clear the air. At least two more major superpowers are, in essence, aligning themselves with the U.S., not quite ready to believe that the Libra is everything it’s made out to be.

In China, regulations promulgated by the country’s central bank will make it virtually impossible for the Libra to be offered there. If a major crypto project could be done there, it most likely would have already seen daylight, launched by any of the country’s big Internet companies.

However, those companies have stated that they have no plans on launching their own digital currencies. Tencent CEO Pony Ma was quoted in a CoinDesk report saying the company isn’t ready and adds about Zuckerberg’s pet project, “The technology [of Facebook] is already mature enough so it’s not difficult [to implement]. Now it just depends on whether it can obtain regulatory approval.” Given China’s position on crypto, that approval is most likely not going to be given.

Eric Jing, the CEO of Alibaba payments affiliate Ant Financial, has stated since last year that it wasn’t interested in crypto, going so far as to state that it would stay completely away from the currency, but that it sees a bright future for blockchain technology.

The VP of Chinese Software Developer Network (CSDN), Yan Meng, believes that Facebook simply doesn’t have a simple solution to global payments and is, therefore, borrowing ideas. He explains, “Facebook just can’t do a global payments network via traditional methods, which require applying for a license and preparing foreign exchange reserves with local banking, one market after another.”

Russia is also going to avoid the Libra. According to Anatoly Aksakov, who chairs the government’s Committee on Financial Market, has said directly that the Libra will not be legalized in the country. According to a TASS report from a couple of days ago, he asserted, “With regard to the use of Facebook cryptocurrency as a payment instrument in Russia at this stage—my opinion is that in our country it will be banned,” adding that there are no plans to embrace legislation that “gives space for active use of cryptotools created in the framework of open platforms [and] blockchains.”

Back in the U.S., the chair of the House Financial Services Committee, Maxine Waters, stated earlier this week, “Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action.”

As much as the Libra has been hyped, it looks like it is going to find difficulty operating legally in certain jurisdictions. However, don’t expect the project to fizzle— there are still plenty of areas around the world where the unbanked might turn to Facebook for more than posting pictures of what they had for lunch.