After announcing its intention of releasing a global digital currency called Libra, Facebook has taken a lot of fire from lawmakers and has spun the dreams of investors. Representatives of Calibra and Facebook spoke before Congress making their case, in an effort to convince the US Government that they will provide a safe top cryptocurrency.
The main goal of Libra is to act as an inclusive and stable coin available for people with no access to other banking services. The hearings turned into reminders of Facebook’s failures with privacy rather than a clear discussion of their future plans.
US lawmakers are explicit in their position for now. Libra will not see the light of day if the process of creating it is not transparent and the initiative does not adhere to strict financial regulations.
There’s even an implicit desire to ban cryptocurrencies on US territory due to national security concerns. The recent rise we see in fake Libra accounts and pages on the very platform of Facebook has really undermined the company’s efforts to make a compelling case in defense of their project.
It doesn’t bode well for Facebook if they cannot put a lid on the situation. The fake accounts, groups, and pages claim affiliation with Facebook, praying on the naive nature of traders who are not well-versed in the problems of the online trading industry.
Novices already believe that Libra is a fact, when it’s still in its development stage. But that has made people easy prey for scammers. And what looks bad in Facebook’s corner is that they only took action to suspend such accounts after the story blew in online media outlets.
Online traders and investors operating on exchanges or using systems like Bitcoin Loophole to trade, are aware of the dangers. But most people aren’t. How Facebook is going to handle this threat to its reputation will be one of the defining factors of how its Libra project is going to be treated – with trust or as an even bigger social and financial risk.