Facebook will be questioned by global regulators on Monday, 16th September, about its cryptocurrency, Libra. The session comes after the European Union showed deep concerns about the Libra project and its effect. The European Union (EU) has shown concern about Libra being a threat to the European banking and financial system. The news was reported by Guardian on 15th September.
The sessions which will be held in Basel on the 16th, would be attended by representatives from 26 central banks from all around EU. The representatives from the U.S. Federal Reserve and the Bank of England would be joined by the European Central Bank and other member national banks in the session.
According to officials tied directly to the event, the banks have also asked the founding members of Libra crypto to submit a statement as well. Facebook has created the project in partnership with many different tech giants of the world, and a representative from all the founding members are expected to be at the hearing too.
EU and its member countries have been especially critical about Libra and Facebook’s plans. Quite recently, Germany and France publicly criticized Facebook’s cryptocurrency as a threat to their financial sovereignty.
Libra Under Fire
Ever since the white paper for Libra was published, the crypto project has seen wild criticism. Within 24 hours of the white paper being published, U.S. Congress asked Facebook to stop all work on the cryptocurrency and its representatives were called for a hearing. The U.S. Congress gave Libra the opening publicity it needed and suddenly, Libra became the talk of the town as it pushed cryptocurrency and the talk surrounding it into the spotlight. Kyle Asman the founding partner at BX3 Capital in August said that:
The fact that cryptocurrency is being discussed in front of Congress is a huge step in the right direction for those of us who have worked so hard to make digital assets a legislative priority.
Kyle was not wrong about that, crypto was pushed into the spotlight and in an amazing turn of events, it is again being discussed on news channels after the infamous bitcoin crash in 2018. The story was so huge that even President of United States, Donald J. Trump also weighed in on the matter on twitter saying:
Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity. Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks.
The United States has not been the only country threatened by Libra, China has been the most vocal against Libra. Chinese officials have labeled it harmful for cross border payments and economy. The Chinese have already started working on their own People’s Bank of China (PBoC) backed cryptocurrency that would be launched this year to minimize the effect on the Chinese economy if Libra ever finds its way to the light.