An innovation by the Facebook company at the same time brought forth a great interest of its users, media outlets, and a series of issues. After the company announced the launching of its own cryptocurrency, Libra, government authorities stepped up with their demands. There have been numerous optimistic predictions for the growth of the company’s crypto-asset. Experts predict that Libra will reach the value of $1 trillion in the following four-year period. However, the government issued a demand for the involvement of impartial auditors — a third party that would regulate the users’ data storage.
Since the company planned to spread its business in India, by setting up WhatsApp payment in this country, the aforementioned strategy would be a significant advance in the company’s effort to spread their new payment service to more than a billion users. However, the government has adopted an antagonistic position towards the company’s ambitions, both regarding the Libra and the new payment service stationed in India. Behind such an approach of the government and lawmakers is the damaged global reputation of the Facebook company’s privacy and data-sharing scandals that hurt the company’s image.
The issue of trust is what makes the situation between Facebook and Washington so difficult and entangled in various adversities. Since Facebook has violated the trust of its users, Libra is not getting the much-needed support by Washington officials. Moreover, Washington deems the entire Libra project dangerous. Facebook representatives state that one of the project’s goals is to rebuild the state of trust between the users and the company. Libra is designed to be an alternative banking method that would operate at a low, competitive cost — Facebook plans to reinvent its global image through this project.
President Trump Doesn’t See Digital Currency as ‘Real Money’
However, Facebook has determined the continue with their project — Libra will be introduced to the world, regardless of Washington’s opinion. In the case that U.S. authorities remain unfriendly towards this innovation, other companies, such as Alipay, can quickly jump into the game. The whole ordeal became more complicated as U.S. president stated his opinion on cryptocurrencies. The President said that he doesn’t consider cryptocurrencies as money. Furthermore, Donald Trump noted that if Facebook has the ambition to become a bank, they need to go through all the regulations, just as any other bank would.
This statement by President Trump came at a time when Libra’s scrutiny has already affected Bitcoin. As the hearings regarding Facebook’s cryptocurrency progressed, the price of Bitcoin dropped by almost 9% percent — the drastic decline has increased in the following period, reaching the drop of an alarming 16%. The current political climate and the firm, hostile stance of the lawmakers towards Libra started to influence the entire cryptocurrency market. Judging by the developments on the crypto market so far, the decline in Bitcoin’s price may become more severe.