The Libra stablecoin project proposed by Facebook has received a lot of criticism and raised a number of concerns.
As of today, it is difficult to find any institution or any big-name external to the crypto world that is truly in favour of the project.
All sorts of criticisms have come to light, possibly also because the project’s initiator is Facebook, a company that recently has had many problems with user privacy and which seems to generate ever less confidence.
However, the main criticisms came from US policy, as evidenced by the somewhat unfriendly welcome given to project director David Marcus by the US Senate Banking Commission during the hearing on July 16th.
The following day’s hearing, the House Financial Services Committee was again asked to suspend the project until Congress creates a new legal framework defined as “appropriate” to ensure that Libra and Calibra act as they promise.
Marcus himself replied by reiterating that they do not intend to launch the project until it has been analysed and understood by the institutions.
There are even those who have suggested that the project should be nationalised since it is currently “a currency controlled by an undemocratically-selected coalition of largely massive corporations”.
When asked about the possibility of verifying that, as promised, all issued tokens would be fully covered by an underlying basket of fiat currencies, Marcus replied that the Libra association could be regulated and controlled by a supervisory group of G7 nations.
Another MP, Warren Davidson, even suggested that coins like Libra are actually “shitcoins”, unlike Bitcoin: “there’s Bitcoin, and then there’s shitcoin“.
In response, Meltem Demirors said that, while Bitcoin is decentralised, Libra is highly centralised, which means that it cannot be defined as a cryptocurrency.
Outside the strictly political world, however, former CFTC president Gary Gensler stated that Libra would appear to be an investment vehicle, similar to some banking structures, and should, therefore, be treated as a security token.
In other words, not only are there many sceptics, but there are also many questions raised to which Facebook has been requested to give clear answers. The problem is that these technologies are so new and unprecedented, that it is really very difficult to find clear answers, even if wanting to do so.
An out of the box voice was that of SEC Commissioner Hester Pierce, better known as “crypto mom”.
“One of the things that excites me about Facebook’s Libra is that it’s really a way to bring the world together so that people can collaborate from all across the world and get paid for their contributions to projects in ways that doesn’t involve complicated currency transactions. Everyone can get paid with the same currency, so it’s almost like the money to go along with the internet and I think that’s where the potential value of cryptocurrency lies”.