Today, the U.S. Securities and Exchange Commission (SEC) once again rejected the proposal of the Bitcoin ETF filed by Bitwise, and people said that another positive of 2019 fell through. Like the Bitcoin ETF, Libra has had a bumpy journey, even worse than the ETF, and has recently encountered all directions.
Since Facebook released Libra’s white paper in June, it has faced regulatory pressure from governments around the world, especially European and American countries. There are hearings on the one hand, and various warnings and reviews on the other. Despite this, Libra is still continuing to promote the project and cooperate with regulators. Supervision, but it is the feeling of survival in the cracks. Even many people in the industry are optimistic about Libra, thinking that this is a milestone event for digital currency to change the economic system, but the recent besieged situation of Libra has to make us worry whether it can be "born" smoothly.
Libra Association members quit, product director leaves
Last week, on October 4th, PayPal, one of the founding members of the Libra Association, issued a statement announcing its formal withdrawal from the Libra Association, which brought a relatively large impact on Libra.
PayPal said in a statement, "The company has decided to abandon further participation in the Libra project initiated by Facebook and will continue to focus on the company's existing mission and business focus."
PayPal also stated, "We will still support Libra's vision and look forward to continuing the dialogue on ways to cooperate in the future. Facebook is a valuable and long-term strategic partner of PayPal, and we will continue to cooperate with and support Facebook in a variety of capabilities."
Having said that, it is obviously very official. It can be seen that at the moment when Libra is facing a lot of doubts and investigations, the founding members of these associations must also be afraid of risks, worrying that supporting Libra will bring unnecessary supervision and harm to their business. Censorship, so one after another began to retreat.
According to foreign media reports, in addition to PayPal, the other two major members, Visa and MasterCard, are also considering withdrawing from the Libra Association, and members of the US Congress are calling on another digital payment agency, Stripe, to reconsider cooperation with Libra.
According to the introduction of the Libra white paper, the Libra Association is composed of 28 financial, e-commerce, digital currency and Internet companies, and PayPal, Visa, and MasterCard are the core members.
Facebook may have thought that with the support of these Libra Association members, the Libra project should be able to reassure regulators. Now that the support of several core members is missing, Facebook may have to seek support from other sources.
The withdrawal of members of the association may hinder the development of Libra digital currency (it is said that most of the members of the Facebook digital currency development team come from PayPal, such as David Marcus, the head of Calibra), and will also damage the confidence of the project team and the outside world.
On the one hand, the core members of the association withdrew, and on the other hand, the Libra product director also left. On October 10, according to foreign media sources, people familiar with the matter revealed that Simon Morris, the product manager responsible for managing the Libra Association, had left in August.
This series of news has to make people wonder whether Libra is going to be "aborted", although many people have said that Libra will not be launched as scheduled in 2020.
Regulatory agencies in many countries "killed", Libra fell into "internal and external troubles"
In addition to "internal troubles", Libra has been facing "foreign troubles". European and American central banks and financial regulators have issued multiple questions and warnings, calling for the suspension of the Libra project. Since Facebook announced the release of the Libra project in June this year, it has thrown a depth bomb in the entire industry, causing ripples and triggering a series of market reactions.
The most obvious manifestation is the regulatory pressure that has been suffered all the time. Considering the financial risks it may bring and the challenge to currency sovereignty, regulators in many European and American countries are opposed to Libra.
In July of this year, the U.S. House of Representatives Financial Services Committee sent a letter to Facebook executives such as Zuckerberg, asking them to immediately stop all work on the digital currency project Libra and the digital wallet Calibra. U.S. President Donald Trump also slammed the Libra plan, saying it would "facilitate illegal behavior, including the drug trade and other illicit activities."
According to the Wall Street Journal Chinese website, the European Union will propose legislation to prevent Facebook's proposed digital currency Libra from undermining the European single currency and being used as a money laundering tool. This is one of the most stringent regulatory measures against Libra so far. They believe that Libra will pose a systemic threat to the euro, so whether it is from the perspective of financial stability or the protection of financial investors, Libra needs to be strictly regulated.
The attitude of the United Kingdom is different from that of the European Union. It does not hold a clear opposition, and even welcomes it. Recently, the Financial Policy Committee of the Bank of England stated that "Libra currency may become a systemically important payment system."
In view of the differences in attitudes towards Libra in various countries, Facebook executives may choose countries or regions with a milder attitude towards Libra and looser regulation to launch services.
Developers focus on developing the mainnet, Zuckerberg will attend the hearing
Libra is currently facing many difficulties, but it seems that it has no intention of giving up.
On the one hand, Libra developers are focused on developing the main network. So far, Libra has released multiple blockchain browsers (such as Libranaut, Libraview, Librabrowser, and Libexplorer, etc.), and some projects have also integrated the Libra testnet. To their wallets, like ZenGo. Libra digital wallet development company Calibra has been focusing on the development of Libra Core on GitHub.
On the other hand, according to foreign media news, the House Financial Services Committee (House Financial Services Committee) announced that it will hold another hearing on Libra on October 23. Facebook CEO Zuckerberg will testify and answer everyone directly. Questions about Libra.
The previous two hearings did not dispel the doubts of Congress. This hearing will be the third hearing held by Congress on Libra. Kerberg will be the only witness at the hearing.
I don’t know if the result of the hearing will be different if the CEO is present in person this time. After two weeks we can look at the results.
In fact, for the industry, Libra is considered an innovative move. The original intention of establishing an intergenerational payment network is also a good idea, which is of great significance to the popularization and global circulation of digital currency. But its biggest problem is that it has the possibility and risk of threatening and shaking the country's currency sovereignty, and it is easy to be targeted. This is where it has the advantages and disadvantages of being the world's largest social platform.
Therefore, regulators will find various reasons such as currency security, privacy protection, anti-money laundering, etc. to suppress and limit the development of Libra. This is a policy-oriented result.
Therefore, under the current circumstances, if there are no better countermeasures or coordination results, then Libra is likely to be tested and promoted on a small scale in the end, bypassing these strong regulatory systems, but this is also It has deviated from the vision and original intention of Libra's original design, and it will depend on how the project team makes decisions.
