Gloomy Future For Libra Crypto as Central Banks Pose Tough Questions
Not a week has gone by since Facebook announced its lofty crypto ambitions that it hasn’t been torn apart for one reason or other. Now it is the chance for the central banks of the world to grill the social media giant on its plans to compete with them all.
Calibra Crypto Concern Intensifies
US lawmakers have had their turn at lambasting the crypto project and this week it will be the turn of the bankers to get their gloves on. Officials speaking to the Financial Times said that Libra representatives are meeting with officials from 26 central banks in Switzerland today.
Two of the planet’s largest banks will be represented which are the Bank of England and the US Federal Reserve and it is unlikely either of these will be supportive of the project. The session is to be chaired by the European Central Bank’s Benoît Coeuré.
Facebook, who haven’t really had a choice, has said it welcomes dialogue with regulators and banks and purposefully set a long launch schedule for this purpose. Clearly Zuckerberg et al knew there would be heavy resistance to a new global currency with potentially billions of users that is controlled by a billionaire and a consortium of US tech and finance giants.
Politicians and bankers generally share the same opinion of cryptocurrencies, knowing that they have the potential to undermine central banks and the existing financial system that is tightly controlled by the governments of the world.
Both France and Germany have already stated that they want nothing to do with Libra and that it should be blocked in the EU. It appears that the market for this crypto coin is diminishing before it has even got off the ground. India, which is the social media platform’s largest user base, has said Libra would not be permitted on its shores, and China has banned the platform in entirety.
Scam Central
It was also reported this week that scams relating to the sale of Libra tokens were already increasing. This is surprising since the minting press has not even been fired up yet. Tomer Barel, Calibra’s chief operating officer, said that the company has no connection to any trading that is taking place in Libra investment tokens, adding that they don’t even exist yet so whatever is being sold at the moment is thin air.
Ironically users have been setting up fake pages and groups on Facebook’s own platform impersonating official Libra token sales outlets. It is this sort of thing that makes the company totally unsuitable to manage global finance when it cannot even control what users are doing on its own website.
Facebook is clearly running out of friends, and it sure doesn’t have many likes for the crypto project but considering its track record, that notion is hardly surprising.
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Martin Young, Khareem Sudlow