Facebook’s Libra Currency Faces Resistance from Regulators, Consumers

A petition by consumer groups from the US called for a moratorium on Facebook’s planned digital asset, Libra.

Facebook’s Libra is still far from a launch, but American consumer bodies are staging a backlash. A petition has called for a moratorium on Libra, from Congress or other regulatory bodies.

Even after the launch of thousands of digital assets, the decision of Facebook to create the Libra Foundation and launch a coin in 2020 caused reactions from regulators, both in Europe and the USA.

“The Facebook proposal to create a new cryptocurrency as part of its broader Libra project raises profound questions about national sovereignty, corporate power, consumer protection, competition policy, monetary policy, privacy and more. The U.S. regulatory system is not prepared to address these questions. Nor are the regulatory systems of other nations or international institutions,” the petition states.

The petition lists multiple concerns, mostly tied to the fact that the Libra Foundation will have decisive power on the protocol. Questions were raised on what would be done with the fiat held by Libra sellers, and whether it would earn interest while Libra holders miss out. Other concerns included privacy and tracking. Since Libra would be an international asset, questions were raised on what resort its users would have in cases of fraud.

Additionally, Libra could have an unexpected effect on small-scale economies, and bring back a grey economy, the petition members point out.

At the same time, the Libra project has already attracted developers, who are testing the technology. Recently, Xapo Wallet, one of the best-used apps in the crypto space, has also joined the project: View on Twitter

The recent discussions and accusations have led David Marcus, CEO of Calibra, to issue a lengthy statement explaining the real intentions of the Libra Foundation. Marcus pointed out that Facebook will not solely control Libra, and instead hundreds of entities may participate and secure the network.

“Facebook will not control the network, the currency, or the reserve backing it. Facebook will only be one among over a hundred members of the Libra Association by launch. We will not have any special rights or privileges,” said Marcus.

Additionally, Calibra will not be the sole wallet provider, and Libra should be accessible to multiple custodial and non-custodial wallets.