A Common Danger Unites Even The Bitterest Enemies
By Yaniv Feldman on ALTCOIN MAGAZINE
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In Latin, Libra means balance. This is something I’m sure Facebook thought about when they named the project, but ironically, less than a month after the announcement, it seems that balance is nowhere to be found. Pretty much every major regulator on earth has “expressed concerns” over the different risks Libra puts the global and local economies in.
Facebook’s David Marcus, who heads the company’s blockchain efforts and leads the Libra initiative within Facebook is due to appear in front of two congressional hearings about the project next week. Preparing the grounds for Marcus’ appearance, Jerome Powell, the chair of the Federal Reserve testified in front of the House Financial Services Committee, saying that Facebook should not be allowed to launch its Libra cryptocurrency until the company details how it will handle a number of regulatory concerns. According to Powell, there are “serious concerns” around the project revolving around “money laundering, consumer protection, and financial stability.”
Even Trump has managed to forget about China for a second and had a few words to say about Libra. While Trump didn’t dismiss Libra all together, he did declare he is not a fan of Bitcoin, which is “based on thin air” and the if Facebook wants to become a bank, then they should “get a Banking Charter” and to be subject to banking regulations like any other bank.
And it seems that Trump is not alone in this fight. It appears that Libra is now the common enemy of both sides of the trade war. Wang Xin, director of the People’s Bank of China (PBoC) research bureau, has officially announced that the bank decided to create its own digital currency While it is a known fact that the PBoC is working on creating a sovereign Digital Currency for at least a year, the timing of this announcement is not a coincidence. In his statement, Xin specifically that one of the reasons that the PBoC looks at Libra as a threat to the country’s economy is because of the unclear role of the United States dollar once Libra is issued.
And if all that isn’t enough, it seems that Facebook’s biggest market is standing firm on its government’s decision to ban cryptocurrency within its jurisdiction. In response to the potential restrictions, Facebook announced this week that it would not offer any of the “Calibra Digital Wallet” services in India.
Putting aside for a second the G20 task force that France is now forming to examine the ramifications of Libra and the ECB’s objections, it looks like Libra is running out of markets before it even went out the door.
If the two of the world’s biggest developing economies the world’s largest source of international remittances will stand united against this new “common enemy,” I don’t see the two sides of the scale balancing any time soon.
Did The SEC Make Peace With Crypto Token Offerings?
While everyone else is talking Libra, the only regulator that doesn’t give a damn (probably because they know that someone else will probably stop this, way before it comes through their door) just approved two new token offerings this week, creating two precedents under Regulation A+.
While other firms have previously taken advantage of Regulation A+ funding, Blockstack’s Token Sale marks the first time that non-accredited investors will receive a token, rather than shares in the company.
On the other side of the fence, The SEC has also given the green light to Props for its own Reg A+. Unlike Blockstack Props will not use the offering to raise money but instead to do what is called an Airdrop, or compliantly offering rewards to content creators and consumers on its network.
Why Should We Care About This?
After all the scrutiny and legal actions that the SEC has taken against incompliant ICOs, everyone understood what they couldn’t do. These proceedings make the first time that the SEC says “That’s OK, you CAN do that.”
While this news didn’t quite make the headlines for people who don’t deal with regulations on a daily matter, I expect this to have the same effect on the market as an approval of a Bitcoin ETF will. And while I was talking about the retail market, this has a significant impact on institutional investors as well. To make a point, the Harvard Endowment, one of the leading (yet rather traditional and risk-averse) institutional investors in the US has invested $12.65M directly in Blockstack’s token sale.
This doesn’t mean we’ll see bags of money flowing into the crypto market as a direct result. The fact that there is now a compliant way to do things will probably start a new wave of ICOs (or IEOs, STOs or whatever token offerings you might want to call them) which would bring in new investors that previously couldn’t or wouldn’t enter the market due to different regulatory concerns.
Do you think Libra would succeed? What is your take on the recent SEC approvals? Would love to hear your thoughts down at the comments section.
