Recently, a talk was held between The Monetary Authority of Singapore (MAS) and Facebook regarding its most ambitious Cryptocurrency project “Libra” that it has just announced. There have been some regulatory issues that need special attention. It is seen that Facebook‘s Cryptocurrency Libra has to overcome the obstacles that are preventing it. Ravi Menon, the Managing Director of MAS stated at a media briefing regarding the situation:
Ravi has also pointed out that the concerns which are being raised regarding Facebook‘s Libra are not at all trivial. The primary issues that are revolving about Libra are all about the primary aspects of security and privacy. Most importantly, the uncertainty about Facebook‘s Libra is not just limited to Singapore only, but the concerns are being raised in other places as well. Also, there is a natural inclination of the banks to go against the Facebook Crypto Libra.
The Cryptocurrency world has emerged out on the global financial scene after the most prominent global economic crisis of 2008. As the debt-based banking system crashed across the globe and businesses went bankrupt, issues embedded in the centuries-old system of banking and became evident to the people. Amid this utter debacle, people had started to look for alternatives to it. Capitalizing on the slight rebellious attitude towards the banks, Bitcoin came to the frame. It provided the world with a decentralized, internet-based peer-to-peer (P2P) monetary system.
This anti-fiat vibe thus naturally inclines the banks to go against the Cryptocurrency world with Facebook’s Libra being one of its children as well. The major Cryptocurrency, Bitcoin is the main threat to banks in this regard. Although Libra is not a pure Cryptocurrency since it has multiple pegs with fiat and is not fully decentralized, it still is a tool just to build on blockchain technology, the same technology lying underneath the entire crypto world, which can drive up adoption of other cryptos along with itself.
Ravi furthermore points out that the current picture regarding the working mechanism of Libra has not been completely understood. Until and unless the banks are sure of the regulatory aspects of Facebook and the security of people all over the world, Facebook‘s Libra will have to face a tough time.
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