Posted on

Libra Is Like Sending a Friend Request to Terrorists, Politician Says

In a fiery tweet, US Congressman Brad Sherman has claimed Facebook’s Libra could benefit oligarchs, terrorists and drug kingpins.

A United States Democratic congressman has claimed “Mark Zuckerberg is sending a friend request to oligarchs, drug dealers, human traffickers and terrorists” by launching Facebook’s Libra cryptocurrency.

In a combative tweet on July 17, Brad Sherman described Libra as the “Zuck Buck” and he accused the Facebook CEO of deliberately attempting to circumvent America’s anti-money laundering laws.

Sherman’s post was accompanied by a mock Facebook screenshot that showed Zuckerberg sending drug kingpin Joaquin “El Chapo” Guzman a friend request.

Underneath, the billionaire’s other friends are listed as the Palestinian group Hamas (which the US and the EU designate as a terrorist organization), North Korean leader Kim Jong Un, Russian President Vladimir Putin, and registered sex offender Jeffrey Epstein.

A fiery hearing

Sherman took David Marcus, the CEO of Facebook’s Calibra crypto wallet, to task during an explosive hearing about Libra in Congress on July 17.

The congressman warned the Financial Services Committee that Libra was “the biggest thing this committee will deal with this decade” and rejected Marcus’s assertions that there was a distinction between Facebook and Libra.

Sherman demanded that Zuckerberg appeared before lawmakers, and even claimed that Libra had the potential to endanger America more than the 9/11 attacks orchestrated by Osama bin Laden. He went on to say:

“If cryptocurrency is used to finance the next horrific terrorist attack, 100 lawyers standing in a row, charging $200,000 an hour, are not going to protect his [Zuckerberg’s] rear end from the wrath of the American people.”

Posted on

Libra Will Upset World Economy if It Isn’t Regulated Tightly, G7 Warns

The G7 warned it “cannot accept private companies issuing their own currencies without democratic control” as Libra continues to face resistance.

Cryptocurrencies such as Libra risk upsetting the world’s financial system if they are not regulated tightly, G7 finance ministers have warned.

According to Reuters, French finance minister Bruno Le Maire told a news conference on July 18 that the G7 “cannot accept private companies issuing their own currencies without democratic control.”

His remarks followed informal talks in Paris, where the Group of Seven expressed vehement opposition to the prospect of firms having as much power as countries in creating means of payment.

The ministers and central bank governors also warned:

“Stablecoins and other various new products currently being developed, including projects with global and potentially systemic footprint such as Libra, raise serious regulatory and systemic concerns.”

Benoit Coeure, a European Central Bank board member, had told the meeting that global stablecoins could boost competition in the payments sector, reduce fees for consumers and support greater financial inclusion. However, he warned that they could undermine efforts to clamp down on money laundering, terrorism financing and tax compliance.

Global pushback

The warnings come after Facebook faced tough questions about Libra at hearings in Congress on Tuesday and Wednesday of this week. David Marcus, the CEO of the tech giant’s Calibra crypto wallet, stressed that the project would not launch until all regulatory concerns had been addressed.

This didn’t stop politicians at the hearing from criticizing Facebook for its past failings in protecting user data, and questioning why the company thought it was fit to launch a stablecoin on such a global scale.

Other lawmakers expressed concerns that Facebook could undermine the U.S. dollar and the American economy by basing Libra in Switzerland.

Posted on

Anti-Bitcoin Congressman: Libra Could be as Damaging as 9/11

Bitcoin Skeptic Bashes Libra

On Wednesday, Libra was the primary topic of discussion for the House Committee on Financial Services. Unsurprisingly, there was a multitude of U.S. politicians that expressed disdain towards the corporate cryptocurrency project. One specific comment stood out though, for both the Bitcoin community and those watching eagerly from the sidelines.

A few hours into the six-hour plus hearing, Brad Sherman, a Democratic Representative from the overall pro-innovation California, took the stage. In an unprecedented turn of events, Sherman claimed that while Facebook is truly innovating with its Libra blockchain, innovation as a concept and trend isn’t good per se. (What?)

The Californian representative noted that the “most innovative thing that happened this century” was when Osama Bin Laden masterminded the horrid 9/11 attacks on American soil, crashing a multitude of planes into key landmarks and places of business. What followed this attack was a war on terror, during which the U.S. was mandated to step up in terms of its technology and weaponry. In that sense, the 9/11 attacks were “innovative”.

Nuances of this analogy aside, Sherman went on to quip that Libra “may do more to endanger America than even [9/11].” Shocker, right?

He backs this statement by noting that cryptocurrencies are a fan favorite of terrorists, so to speak, presumably thinking of the reports on the purported use of Bitcoin by the Islamic State. What he is suggesting that if there is another terrorist attack on American soil, it may just be funded by digital assets, which in his mind includes Libra despite its differences from the decentralized cryptocurrencies that readers of this publication know and love.

Even if crypto-related terrorism isn’t a threat, Sherman goes on to note that Libra, which he hilariously dubbed “Zuck Bucks” for some inexplicable reason, is likely to see use by “drug dealers, tax evaders, and sanctions evaders.”

The Californian Representative then went on a tirade about how David Marcus, the head of Blockchain at Facebook, was the only one in the hot seat, remarking that “Zuck” should be grilled. Sherman roared:

“But someone with an understanding of the politics of this country needs to explain to Mr. Zuckerberg that if cryptocurrency is used to finance the next horrific terrorist attack against Americans, a hundred lawyers standing in a row, charging $2,000 an hour are not gonna protect his rear end from the wrath of the American people.”

He joins Mark Cuban, the “Shark Tank” star; Donald Trump, the president of the United States; and Federal Reserve chairman Jerome Powell as prominent skeptics of the Silicon Valley-backed coin.

Not All Doom and Gloom

It is important to note that Wednesday’s impassioned hearing wasn’t all doom and gloom for Libra, and thus the rest of the cryptocurrency ecosystem.

One notable highlight was when Meltem Demirors of Coinshares broke down Bitcoin for the Congress committee, specifically touching on how it is different than Libra and how it actually operates. She received some tacit support from two or three Congressmen, one of which somewhat lauded Bitcoin as an “unstoppable force” in an earlier CNBC interview.

Photo by Vadim Sherbakov on Unsplash

The post Anti-Bitcoin Congressman: Libra Could be as Damaging as 9/11 appeared first on Ethereum World News.

Posted on

Ocasio-Cortez Criticizes Corporate-Controlled Money in House’s Libra Hearing

Congresswoman Alexandria Ocasio-Cortez highlighted the idea of scrip in today’s Libra hearing, remarking that it is destabilizing.

New York Congresswoman Alexandria Ocasio-Cortez addressed the control of Facebook’s Libra cryptocurrency in today’s United States House Committee on Financial Services hearing.

As per a recording of the event, provided by C-Span on July 17, Ocasio-Cortez addressed Calibra wallet CEO David Marcus, asking, “[Facebook] wants to establish a currency and act through its wallet as — at minimum — a payment processor. Why should these activities be consolidated under one corporation?”

Regarding the membership of the Libra Association, Ocasio-Cortez asked, “Were they [the members] democratically elected?” After Marcus answered that it was not, but was governed by membership standards, Ocasio-Cortez summed up Libra as “a currency controlled by an undemocratically-selected coalition of largely massive corporations.” 

From the issue of corporate control, the representative pivoted to an issue of monetary policy saying:

“You stated yesterday in front of the Senate Committee that you would be open to accepting 100% of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency … It’s called ‘scrip.’ The idea that your pay could be controlled by a corporation instead of a sovereign government. Do you think that there is any risk here? We’ve seen from scrip, to the issues with how Facebook handled our elections, we’re seeing a destabilizing in our public goods.”

Company scrip has been illegal as a form of payment in the U.S. for almost a century, as they were discluded from counting as “proper mediums of payments” with the Fair Labor Standards Act of 1938. 

Ocasio-Cortez also questioned Marcus’ view on whether Libra, as well as currency in general, should be a public good. Marcus said that “sovereign currency should remain sovereign,” and stated it was not his place to determine whether Libra should be a public good.

As previously reported by Cointelegraph, JPMorgan Chase CEO Jamie Dimon claimed that Libra will not be a threat to the financial giant in the foreseeable future.

Posted on

Rep. Waters Opens Libra Hearing With Indictment of Facebook’s Past Mistakes

The chair of the House Financial Services Committee opened today’s hearing on Libra by noting Facebook’s past mistakes.

Today, lawmakers on the United States House of Representatives Financial Services Committee are meeting to discuss the possible effects of Facebook’s proposed Libra cryptocurrency project on the financial system. 

As a Cointelegraph respondent reports on July 17, committee chair Rep. Maxine Waters has opened the hearing with an indictment of Facebook’s past behavior. In her statement, Waters said that there was a, “demonstrated pattern of failing to keep consumer data private on a scale similar to Equifax.”

Waters also stated that Facebook, “allowed malicious Russian state actors to purchase and target ads,” which purportedly influenced the 2016 U.S. presidential elections.

Waters also emphasized that the committee will be discussing the “Keep Big Tech Out of Finance Act.” A draft of the bill recently surfaced, the goal of which would prevent large tech companies like Facebook from creating their own digital assets. The draft reads:

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.” 

Today’s hearing in the House of Representatives follows one in the Senate, wherein lawmakers grilled Facebook’s David Marcus regarding Libra. Amid questions of safety, compliance and consumer protection, Marcus stressed that the Libra project would seek proper approval and registrations with the relevant authorities, including the United States Financial Crimes Enforcement Network.

Posted on

Senator Brown on Libra: ‘A Recipe for More Corporate Power Over Markets’

Senator Brown is concerned that Libra will allow Facebook to gain unfair control over the financial system and dictate new money policy to the detriment of ordinary citizens.

Libra is a “recipe for more corporate power over markets and over consumers,” according to U.S. Senator Sherrod Brown, ranking member of the Senate Banking Committee. 

Senator Brown’s recent comments came by way of an official video tweet by NowThis News on July 16, posted hours after the Senate Banking Committee hearing on Facebook’s Libra.

Brown appeared especially concerned about Facebook gaining the ability to force people to use their money and play by their rules. He remarked:

“What happens when Facebook forces businesses to quit accepting your credit card or your debit card? You could be forced to use Facebook’s new Monopoly money. What about small business owners, forced to use it or lose access to Facebook’s millions of users?”

Following today’s Senate hearing, Brown told the press that he hoped for a comprehensive privacy law to protect users from big tech companies like Facebook; however, he wasn’t confident in the direction it should take.

As previously reported by Cointelegraph, former Republican Congressman and Libertarian Presidential nominee Ron Paul was more concerned with governments holding a monopoly on money. Paul commented:

“historically, governments always have to have monopoly control over money and credit. Obviously that’s why we have a Federal Reserve, instead of allowing the market to operate […] governments aren’t very tolerant of competition, and they’re not even tolerant with using the Constitution to compete with the fiat dollar. Because gold and silver, you can’t use it.”

Posted on

Post-Hearing: Ranking Senate Committee Members Discuss Regulations

Senate Committee Members discussed regulation concerns with big tech companies in a post-hearing press conference.

United States Senators Mike Crapo and Sherrod Brown, respectively the Senate Banking Committee chair and ranking member, shared their views on crypto regulations. Both appear to want comprehensive policy for big tech companies.

The senators made their remarks while speaking with the press following the Senate Banking Hearing on Facebook’s Libra on July 16.

Senator Crapo stressed the importance of building an overarching regulatory framework for data protection — not just for Facebook, but for all Internet companies looking to launch their own cryptocurrencies, á la the Financial Stability Oversight Council for banks. Crapo said:

“We’ve got to look at how we structure data protection in the United States […] We need to move to a comprehensive approach. What that structure exactly is, I can’t tell you.”

When a reporter asked whether Crapo was calling for a “comprehensive privacy law,” Crapo confirmed that he was. 

Senator Brown appeared to agree with Crapo, saying “it will be hard to do something comprehensive, but I hope we can.”

Senator Brown also discussed how the public no longer trusts big tech companies:

“Clearly, Americans don’t trust Wall Street. They now are putting big tech and big banks in the same category. Because they’ve seen the betrayal and the undermining of our democratic values in Facebook and in other tech companies.”

Brown also discussed a bill under discussion with the House Financial Services Committee, “Keep Big Tech Out Of Finance Act,” which would make it illegal for big tech companies in the U.S. to run a digital asset service such as crypto:

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”

Brown remarked:

“I like that she’s doing that. I don’t know yet. I don’t know enough about what she’s doing but I like that she’s raising that issue and wanting to put pen to paper.”

As previously reported by Cointelegraph, libretarian Ron Paul recently spoke up again about his views on cryptocurrencies. According to Paul, the government should not be regulating the crypto space for any purpose other than to prevent demonstrable fraud.

Posted on

Drafted “Keep Big Tech out of Finance” Act Surfaces Days Before Libra Hearings

A draft of a US House bill restricting big tech companies from entering the crypto assets market has surfaced days before the congressional hearings on Facebook’s Libra.

A drafted bill entitled “Keep Big Tech out of Finance” has surfaced online, allegedly deriving from within the United States House of Representatives Financial Services Committee. The document’s metadata dates it July 12.

The bill’s provenance is unconfirmed, but crypto news site The Block quotes an inside source as saying it is with the Financial Services Committee. 

The document reads: 

“A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.” 

The alleged bill goes on to define “a large platform utility” as a tech company that earns annual global revenues in excess of $25 billion. 

Given that Libra is scheduled for hearings before the Senate Banking Committee on July 16 and with the House Financial Services Committee on July 17, this bill seems clearly designed to preempt congressional authority to take decisive action on the issue of Libra.

Libra has attracted commentary and criticism from many corners. Chair of the Financial Services Committee Maxine Waters initiated the congressional hearings on Libra on June 18 by calling for a moratorium on the project. As Cointelegraph reported at the time, Representative Waters wrote: 

 “Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action” 

The night of July 11, US President Donald Trump tweeted similar concerns about the lawfulness of crypto usage, expressing opposition to Libra, Bitcoin and cryptocurrencies as a whole, instead promoting the continued dominance of the US Dollar.

Posted on

Top-6 Issues Experts/Entities Have With Libra

Experts and Lawmakers call for caution over potential risks of Facebook’s Libra cryptocurrency to the global financial industry.

Facebook’s unveiling of its Libra cryptocurrency has generated a lot of attention in the financial world, as well as in the crypto space. So far, the company has announced that its Libra blockchain network will be launched in 2020 and backed by a separate entity, the Libra Foundation. The cryptocurrency is set to enable users to make faster and cheaper international payments online, using platforms such as WhatsApp or Facebook Messenger.

The Libra currency

Just like any other cryptocurrency, Libra is set to have its own wallet called Calibra. Users would be able to send and receive Libra through this wallet by converting fiat currency from their credit cards into Libra coins. Third-party operators would also be allowed to sell the Libra cryptocurrency to users, and the entire process is set to be as simple as buying data for a mobile phone.

Facebook claims that the Calibra wallet “will have strong protection in place to keep your money and your information safe.” This claim has raised a lot of concern about data privacy and security, considering Facebook’s history of mishandling the data of its users. The company says that it plans to use the same verification and anti-fraud processes that are used by traditional credit card issuers and banks.

Libra is more of a stablecoin than an actual cryptocurrency in that its value will be pegged to several trusted currencies to prevent violent price fluctuations. Furthermore, Facebook plans to cede control of the Libra network to the Libra Association Council. The Libra Association Council is an organization that comprises founding members who operate the nodes of the Libra network.

This is not the first attempt by Facebook to create an in-house currency. In 2010, Facebook made moves to become a player in the digital currency space with Facebook Credits. Some reports believe that Facebook Credits were shut down due to an internal decision even though the company first intended for them to be used to pay for day-to-day activities, such as buying meals.

Related: Libra, TON and JPMorgan Coin Compared: Are They Heroes or Villains?

As it seems, Facebook is at it again with ambitious claims of using the Libra cryptocurrency to enable financial inclusion, potentially for billions of unbanked users in developing countries. The social media giant has, however, come under scrutiny from people who believe that Libra is a disaster waiting to happen. Furthermore, several countries have issued inquiries and even hearings regarding the regulatory repercussions of the use of Libra in their respective territories. 

U.S. lawmakers are skeptical of Libra

On July 2, Maxine Waters, a United States congresswoman and chairwoman of the House Financial Services Committee, wrote a letter to Facebook calling for the immediate cessation of any further development on Libra. According to the open letter, Facebook and its partners should pause any further development on Libra until the Financial Services Committee and affiliated subcommittees determine the possible risks Libra poses to the global financial system. The letter also referenced Facebook’s recent privacy scandals that involved data harvesting of over 50 million Facebook profiles. The letter stated: 

“Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action.”

On July 16, the Senate Banking Committee is planning to hold a hearing that will address the concerns over data privacy and the potential risks of the Libra project. Right after that, the House Financial Services Committee will also have a chance to examine Libra’s case on July 17. When asked whether Libra can actually cause a global financial crisis if left unchecked, Gregory Klumov, the CEO and founder of the euro-backed stablecoin issuer Statsis, told Cointelegraph that Libra cannot cause a financial crisis: “Most of the negativity comes from politicians. They’re afraid of losing their monopoly on financial oversight.” He further explained:

“The balance sheet of the association will not be leveraged. A financial crisis is impossible without excess leverage. Also, Libra’s coin might be recoverable if someone’s password is lost or stolen, similar to e-money like with PayPal or Skrill.”

While offering his response to the matter, Andrew Adcock, the CEO of Crowd for Angels, came out with a different opinion: 

“Libra, however, are seeking to utilize multiple assets as coverage, not just one type and are not seeking to be pegged. This could cushion a financial crisis if managed well with transparency and trust.”

Adcock, however, also believes that “the US congressman has shared the concerns and that Libra was launched when the US markets were sleeping probably shows the weight of their potential punch.”

History of Facebook scandals

Several experts recommend caution, considering Facebook’s history of mishandling user data — as was the case with Cambridge Analytica. Now that money is involved, people fear that Facebook could sell user spending and transactional data to banks and other interested third parties. After all, Facebook’s business model is to advertise by routinely allowing researchers to access user data.

According to Forbes contributor Enrique Dans, who is also a senior advisor for digital transformation at IE University, the Libra initiative has the potential to do well. However, he believes that if it were in the wrong hands, it could cause serious damage when it comes to trust. According to Dans, Facebook “has the worst reputation for privacy, along with ethical standards that have seen it involved in accusations of electoral manipulation and even genocide.” Although the company claims to be committed to securing user data, experts believe there is nothing stopping it from monetizing such data.

Facebook started off with a pledge to make the world more open and connected. But like many other experts, Dans believes that the only reason Facebook is planning to launch the Libra coin is to “capitalize on its huge user base.” According to the Libra white paper, Facebook will outsource the management of Libra to the Libra Association Council, an independent nonprofit foundation. However, David Marcus, the Libra head at Facebook and former president of PayPal, explained in a post:

“Facebook will not control the network, the currency, or the reserve backing it. Facebook will only be one among over a hundred members of the Libra Association by launch. We will not have any special rights or privileges.”

He also confirmed that, even though Facebook owns the Calibra wallet company, Calibra’s financial data will be inaccessible to Facebook. But, in response to this move to restore trust, Dans says that Facebook’s “malign philosophy is contagious“ and that it will eventually drag every other partner in the association “down to its murky levels.”

Libra security risks

According to Libra’s white paper, the Libra blockchain is set to be an open-source blockchain initiative that will offer developers a prototype in a prelaunch testnet. This will give developers an enhanced beta bounty program to identify bugs, vulnerabilities and flaws in the system before the official launch of Libra in the first half of 2020.

However, Facebook’s attempts to outsource Libra’s management and development — by allowing anyone to build products with access to billions of users — put a huge target on Libra that can be exploited by bad actors. Making Libra open-source will introduce security risks. These risks can potentially allow a black-hat developer to easily create a wallet that steals funds from users’ accounts. Even though Facebook claims that it will bear the cost of hacks on Calibra wallets, in the event of significantly large losses, the Libra white paper has not yet stipulated a system to solve such a problem. 

The letter from Congress also points out evidence of hacked crypto wallets, which has led to billions of dollars in loses. Therefore, Libra’s Calibra wallet also presents a huge risk to users and investors, who might end up using it. The lawmaker also highlighted how Libra’s white paper provided “scant information” about the project’s security features.

Lack of censorship resistance

In terms of technicality, Libra’s white paper also leaves many questions unanswered, especially when it comes to censorship resistance of the Libra blockchain. In fact, Mustafa Al-Bassam, one of the co-founders of Chainspace — the blockchain startup that was acquired by Facebook to scale research and development for Libra — points out some of the technical loopholes in the Libra white paper.

Al-Bassam is the only researcher on the Chainspace research team who did not join Facebook after the acquisition. According to a tweet thread he shared: 

“Libra could end up creating a financial system that is *less* censorship-resistant than our current traditional financial system.”

Libra’s technical philosophy attempts to solve the problem of scalability by first becoming a private blockchain with a select group of entities managing the Libra coin. However, Al-Bassam says that this presents a challenge when it comes to achieving censorship resistance. Most of the companies partnering with Facebook to form the Libra Association Council are U.S.-based companies, which include MasterCard, Paypal, Stripe, Visa and eBay, to mention only a few. According to Libra’s white paper, these entities will control the Libra network through an association-based model. Al-Bassam argues that this model of control on a blockchain network does not provide sufficient levels of censorship resistance. 

Related: Facebook’s Libra Coin: Initial Reactions Mixed

A spokesperson for MakerDAO, a blockchain-based company, told Cointelegraph that “Libra is built on a permissioned blockchain, which effectively means Facebook and its investors have a certain amount of centralized control over access, transparency and all data.” Even though Libra promises to switch to a permissionless network down the road, Al-Bassam says that, by the time the switch to a more censorship-resistant and open platform is implemented, the main central banks will have full control of the network. Klumov also agrees with Al-Bassam, arguing that: 

“Five years in the crypto industry might as well be an eternity. Both the technology and the market are developing so quickly, that no one can say for sure what will happen in five years. That’s as true of Libra as it is of any other crypto project.”

Libra is not a real blockchain

Despite the hype around Facebook getting into blockchain, the Libra coin has been criticized for not being a “real” blockchain in the true sense of the word. The Libra white paper ignores the decade-old blockchain research that has been achieved by the likes of Ethereum and even Chainspace and payments platform Algorand. 

The Libra blockchain does not have any benefits of distributed governance that is common with most blockchain platforms. Instead, Libra promises to be fully permissionless in about five years. Basically, most of the features that make up a blockchain seem to be missing with Libra. At its best, the single data structure that Libra possesses can be compared with Ripple.

Libra may not really help the unbanked

Facebook claims that it will use Libra to help the unbanked, who live in developing countries like Nigeria, Mexico, Bangladesh, China, Indonesia and India. However, Facebook is forbidden in places like China, and even jurisdictions like Indonesia, Bangladesh and Pakistan have previously put temporary bans on Facebook. In addition, developing countries and their governments have been hostile toward cryptocurrencies, with laws that seek to halt the use of cryptocurrencies. 

Basically, even as Facebook tries to launch a cryptocurrency that will give the unbanked inclusion in the global financial industry, its biggest threat remains to be the government authorities in those developing countries. Furthermore, individuals without access to bank accounts in developing countries are typically those with bad credit history or those who fail to comply with Know Your Customer (KYC) and other anti-fraud and Anti-Money Laundering (AML) requirements.

Realted: XRP, Libra and Visa to Fight It Out for Cross-Border Remittance Crown

Therefore, if Facebook is looking to be an alternative solution, it must ensure that the unbanked are compliant with KYC and AML procedures, otherwise Libra could be shut down. With a user base made up of billions of people from all over the world, it will be difficult for Facebook to completely verify the authenticity of its users.

In addition, Libra’s white paper does not seem to fully rationalize its claim to help the unbanked. The paper cites the World Bank’s data, which shows two-thirds of people globally do not have access to bank accounts. Conversely, the research also shows that the majority of the unbanked actually do not need bank accounts. In developing countries like Kenya, the so-called unbanked are still able to access the convenience of low transaction fees with instantaneous mobile payments without a cryptocurrency while using mobile payment services like M-Pesa.

It comes down to this…

The big question about Libra is whether people will actually use it once it launches. A spokesperson for MakerDAO also told Cointelegraph that it is too soon to predict whether Libra will cause a revolution: “Libra is in the white paper phase so the decisions about how this manifests — and whether they keep it truly open-sourced — will determine whether this is a transformative stablecoin or just another PayPal.” 

There is an argument that Libra can make international payment exchanges in emerging markets much cheaper and quicker. However, with Facebook’s data harvesting incidents in the past, even Marcus admits that convincing people of Facebook’s intentions will be “by far the most difficult, intellectually stimulating and challenging thing.”

While answering a question to lawmakers about how Libra would respond, Marcus admitted that, if regulation is not done right, “it could definitely present systemic risks.” He said:

“This is why we believe in and are committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more.”

All in all, experts in the crypto space are of the opinion that, unless the issues discussed above are addressed in time, Libra could potentially dominate the crypto space and kill competition. Others believe that concerns about Libra are overblown and that Libra’s only real threat is that of digital identity and privacy.

Posted on

US Elections Regulator Gives Tentative Go-Ahead to Campaign Token

The Federal Election Commission has opened a draft letter to the public, in which they approve of Omar Reyes’ 2020 congressional campaign incentives tokens.

The Federal Election Commission (FEC) has tentatively approved an ERC-20 token issued by Omar Reyes to use in an incentives program for his congressional campaign. The FEC reviewed the coin project in a draft advisory opinion on July 5.

According to the draft letter, the FEC believes Reyes is within his rights to issue his Ethereum-based “Omar2020Token” (OMR) as part of his campaign to join the United States House of Representatives from the 22nd Congressional District of Florida

The FEC argues that because the tokens are essentially souvenirs, with no monetary value, Reyes’ committee is free to issue them as volunteer incentives:

“The Commission concludes that the Committee may distribute OMR Tokens to volunteers and supporters as an incentive to engage in volunteer activities as described in the request because OMR Tokens do not constitute compensation; rather, OMR Tokens are materially indistinguishable from traditional forms of campaign souvenirs and nothing in the Act or Commission regulations prohibits a campaign committee from distributing free campaign souvenirs to volunteers or supporters.”

As noted in the draft, these Ethereum blockchain-based tokens are intended to be used as campaign incentives only. The Omar2020 campaign will reportedly conclude with prizes awarded to the top three OMR holders, but will delete its Ethereum contract and dispose of remaining tokens upon the campaign’s conclusion.

The FEC previously wrote an advisory opinion in 2014 on financing campaigns with the number one cryptocurrency, Bitcoin (BTC). The FEC then said that campaigns could receive BTC as donations, but only as in-kind donations, i.e. as a donation of goods and services and not as money. This means that the BTC cannot be used in transactions directly, but could be converted to fiat money and deposited.

As previously reported by Cointelegraph, Democratic presidential campaigners Eric Swalwell and Andrew Yang have both offered to accept cryptocurrency donations for their campaigns.