Ever since Facebook decided to roll back its ban on cryptocurrency related ads on its platform back in mid-2018, the world has known that it’s up to something huge. Months of waiting culminated in Facebook’s own crypto project – Libra. Libra has been dubbed as the Ripple killer and the stablecoin that will help push mass adoption further than ever before. However, multiple groups have spoken out about the project, with the governor of the Australian Central Bank saying that he believes that it will fail to live up to the hype.
Are Banks Worried About Libra Usurping Their Throne?
Facebook has more than 2 billion active users, so launching its own currency could be very risky for banks. If everyone on Facebook started using the token, there would be no real need for fiat currencies, and it’s this that banks are fearing. In a recent Q&A session, Philip Lowe – governor of the Australian Central Bank – said:
There are a lot of regulatory issues that need to be addressed and they’ve got to make sure there’s a solid business case, so we’ve got to be careful before we jump to conclusions.
It looks very much like the Australian Central bank is sharing the same fears as other major banking institutions. However, these banks have government on their side and can use this relationship to shut Libra down with “regulation”. In the US, Libra is already receiving significant pushback from government, a huge sign that the current monetary system is trying to hold on to its power.
Libra is a Centralized Stablecoin
Many have pointed out that Facebook doesn’t have the best history when it comes to using your data sparingly. Some critics have even pointed out that Facebook wouldn’t need to implement KYC and AML as the company already knows so much about its users. From the whitepaper, Libra doesn’t appear as if it will step on the toes of any open, public, or permissionless blockchain network, only the toes of banks. This could be why we’re seeing so many negative comments from bankers and governments.
Facebook Libra coin don’t need KYC. They have so much more data on the 2 billion people. Not just name, id, address, phone number. They know your family, friends, real-time/historic location, what you like… They know you more than yourself. And now your wallet too. Best AML!
— CZ Binance (@cz_binance) June 18, 2019
Lowe went on to criticize Libra more in his Q&A session, but most of his comments feel very much as if they’re all born from fear. When Libra goes live, it has the potential to be the single largest currency in the world – in terms of users. It’s this factor that’s scaring the life out banks – could this be the stablecoin the world has been waiting for?
