Is Facebook’s Libra Project Damaging Bitcoin?

Social-networking giant Facebook announced further details of its so-called blockchain-based currency project yesterday and the crypto asset space has talked about little since. As you’d expect, there have been some pretty strong opinions on the matter. Some prominent names have claimed that the new digital currency system has the potential to onboard and familiarize billions of people traditionally excluded from traditional banking services with a strictly-digital payment system. They speculate that this will, in turn, make it even easier for them to transition to Bitcoin and other decentralized digital assets. The general consensus in the space is that Libra poses very little challenge to Bitcoin. It is entirely different, after all. Centralized, stable, backed by a basket of fiat, and permissioned — Libra has none of the major selling points of Bitcoin are served well by Libra, as per the whitepaper. However, it’s not just the crypto-asset community that has taken interest in Facebook’s new project. Potentially more concerning is how quickly global regulators have swooped in to demand more information. As reported by Brian Fung, a journalist for CNN, the Chair of the House of Financial Services Committee, Maxine Waters, has called it “unchecked expansion” from the social media firm and has recommended that work ceases on Libra until regulators greenlight it.

NEW: The top lawmakers on the House Financial Services Committee are targeting Facebook’s new cryptocurrency, #Libra.

Chairwoman Maxine Waters says it’s another example of Facebook’s “unchecked expansion,” urges execs to testify and calls on FB to stop working on the currency. pic.twitter.com/xOklWsfLdx

— Brian Fung (@b_fung) June 18, 2019

The story is similar elsewhere in U.S. halls of power, too. Senator Sherrod Brown echoed concerns about Libra and the amount of power Facebook could usurp from the government with it. He stated via Twitter that regulatory approval was indeed needed:

Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. https://t.co/IjZOFNai3r

— Sherrod Brown (@SenSherrodBrown) June 18, 2019

Other nations have also called for similar scrutiny. The Bank of England, a French Finance Minister, and a German MEP have all asked for more stringent regulation against the social media firm since the news broke yesterday. Such outcries from global regulators might be directed at Libra for now, but BitcoinFoundation and Crypto.IQ founder Charlie Shrem has stated that the regulatory attention garnered by Libra may ultimately hurt Bitcoin. He argues that Bitcoin regulation has been evolving slowly and the leading digital asset has yet to stir regulators in anywhere near the same way that Libra has in less than 24 hours. If aggressive regulators turn on Bitcoin and other crypto projects, too, the future might be a lot bumpier than many had hoped.

The US gov't is calling for hearings blocking Facebook Libra token.

Over the past 10 years, they have largely left #Bitcoin alone while creating regulations around the industry, some good and some bad.

Facebook may have just fucked us. https://t.co/OPfZCStjSx. Listen now🚀 pic.twitter.com/2dhlf052Ey

— Charlie Shrem (@CharlieShrem) June 19, 2019

What do you think? Has Facebook brought too much regulatory attention to the cryptocurrency industry? Let’s hear your thoughts below.