The words “permissionless” and “regulated” don’t exactly go together. But Facebook’s cryptocurrency project, Libra, is promising to adhere to regulations and be open to everyone, which may turn out to be a tough — if not impossible — task.
That’s assuming there will even be a Libra coin, as originally envisioned.
It’s been a nightmarish week for Libra, with U.S. senators (Democrats and Republicans alike) grilling Facebook’s David Marcus; President Trump saying Libra coin will have “little standing or dependability”; German Finance Minister Olaf Scholz warning against the very idea of private companies launching currencies; and U.S. Treasury Secretary Steve Mnuchin saying Libra raises “significant concerns.”
A draft bill reportedly circulating among the Democratic majority that leads the U.S. House Financial Services Committee aims to completely ban big tech companies (read: Facebook) from issuing digital currency. If such a bill was to become law, it would likely kill Facebook’s Libra project entirely.
Most recently, four consumer advocacy groups — Open Markets Institute, Public Citizen, Demand Progress Education Fund, and Revolving Door Project — have urged members of the Libra Association (which includes Mastercard, Visa, PayPal, Coinbase, eBay, and others) to leave the project. The groups claim Libra’s aims are “unclear” and its leadership structure is “based on fear.”
The attacks have come from all sides and all angles. Some, like Trump, don’t like cryptocurrencies in general. Some, like Congressman Warren Davidson, don’t seem to hate Bitcoin, but are against Libra, specifically, referring to it as a “shitcoin.” Some aren’t happy with the timeframe; Representative Ann Wagner thinks that the proposed 2020 Libra launch date causes concern. And some, like Senator Sherrod Brown and Senator Martina McSally, primarily distrust Facebook, which, let’s not forget, was fined $5 billion by the FTC for privacy violations just a week ago.
David Marcus, Facebook’s head of Calibra — the wallet that will facilitate sending and receiving Libra for Facebook users — was on the stand during the two days of the hearing. His response was to repeatedly yield to calls for regulation.