Could Libra usher in the next digital revolution against banking systems?

19 Jun, 2019
by Ryan Boltman
Analysis
Could Libra usher in the next digital revolution against banking systems?

Facebook is already making huge headlines across the world, following the launch of their cryptocurrency and blockchain called Libra. Should banks and governments be threatened by Libra?

Libra has launched, and it is already talk of the town with governments and banks. Libra will launch to Facebook's 2 billion plus user base, making it one of the most widely adopted cryptocurrencies in history.

However, the project represents a more centralized eco-system than that of Bitcoin, and does not appear to directly compete against Bitcoin and it's benefits, but it does look like it could compete against the banking system.

Euopean lawmakers have already lashed out at the project following the launch, with Business Insider reporting that France's Finance minister Bruno le Maire commented on the Libra cryptocurrency saying that operating as a sovereign currency is "out of the question". Le Maire has even asked the G7 central banks to produce a report about the risks posed by the new currency.

German member of the European Parliament Markus Ferber has also shown concerns regarding the currency, saying that it could turn into a "shadow bank" that would "set off alarm bells for regulators".

Regulatory concerns have become a major concern for Libra, with governments and central banks worrying about the potential ramifications of the project launching worldwide. It appears that one of the major concerns regarding the launch of a Facebook cryptocurrency, is the amount of data the company already holds pertaining to it's users, with Giovanni Buttarelli, European Data Protection Supervisor stating "Any further concentration of personal data poses additional risks to the rights and freedoms of individuals — so the proposed launch of a digital coin (cryptocurrency) by Facebook will require careful scrutiny from several enforcement bodies, including data protection authorities."

Concerns related to the amount of data Facebook already has on it's users and how much more they will be able to attain from users transacting in Libra could cause problems down the road.

It appears the biggest threat for Libra at the moment is coming from government and central banks who appear to either be concerned about what illegal activities might be used when transacting with Libra, or that Libra could effectively remove the power from the banking system.

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