Governments are taking a hard look at Facebook’s proposed cryptocurrency Libra.
They fear that it will endanger consumer privacy, threaten fiat currencies and give Facebook too much power over the financial system.
The Securities and Exchange Commission is pondering whether Libra would actually be an exchange traded fund subject to the SEC’s regulation. President Trump tweeted recently that Facebook should get a bank charter and be regulated by the Office of the Comptroller of the Currency, the Federal Reserve Board and the FDIC.
There are significant issues for the cryptocurrency, including how the Libra Association will earn interest on all deposited fiat money, how the governments could track transactions to prevent money laundering schemes, whether Libra could have a negative effect on volatile or weak fiat currencies and whether it could be used to finance terrorism, drug dealing or other nefarious industries.
A 2018 study from the University of Technology Sydney found that about a quarter of bitcoin users, and nearly half of all bitcoin transactions, are involved in illicit activity.”