Regulators working in the financial industry need to act fast in order to prepare for the United States’ tech giant’s push against corporations such as Facebook. They feel it is not a good move to allow them the ability to develop regulatory voids for their own financial services activities. Many believe it is just too risky. European Central Bank executives said they need to move quickly and get ahead of this before it develops further.
Facebook is planning their own digital currency known as Libra. It has policymakers everywhere scrambling to get it rejected. According to the three top financial regulators in the United Kingdom, they’re working together to figure out how they should respond. While they do not want to completely open the door to the idea, they are trying to approach it with an open mind.
A fire has also been drawn against the plan in Washington. Many influential democratic groups are demanding the project be halted as it continues to raise profound questions about authenticity. The development of new digital currencies is starting to expose different deficiencies within existing regulations. This causes many problems in the banking system because they have failed to adopt new technology that can accurately regulate it.
When Libra hits the mainstream cryptocurrency market, it may end up causing a new threat to consumers. There are many concerns about consumer spending habits with regards to Libra. According to a report by Bloomberg, though Facebook designed the proposed crypto, it is operated with many partners, including credit card companies, payroll writers and consumer companies. It is set to be available in the first half of 2020.
Facebook has said Libra will not be connected to any user’s data in order to target advertisements. However, Facebook is planning ways to incorporate Libra payments into their own specific products which are used by billions of people across the world. This is causing many concerns for the experts on the subject.
According to cryptocurrency experts, it can be a dangerous tool that is readily available to make purchases by consumers who already have a difficult time controlling their budgets. When asked for a statement on this concern, Facebook declined to comment. Many Americans report their spending is greatly influenced by social media posts and advertisements. When compared to other cryptocurrencies such as Bitcoin, Libra may be more readily available and easier to use for everyday purchases such as buying groceries and bill paying.
Dil Bole Oberoi
