- Facebook’s Libra, along with many other stable coins, could be classified as securities and subject to increase regulatory scrutiny.
- The bill called the “Managed Stablecoins are Securities Act of 2019” was proposed.
- Facebook not in the favor of the bill, and is denying the statement that Libra is Security, “it’s more like Paypal” says Libra chief David Marcus.
The bill is called the “Managed Stablecoins are Securities Act of 2019” which is given by two members of House Finance Service Committee Reps. Sylvia Garcia and Lance Gooden.
As the bill was announced, Garcia specifically talked about Libra, saying that Facebook’s coin, “are clearly securities under existing law”.
The bill aims at creating a clearing a clear film between the investor and the company so that they can trust the issuers behind their financial assets. The law will be increased by security by applying the law which is used to check the financial securities of this new era of digital currencies.
The reaction of Facebook on the Bill
Facebook has been constantly pushing back on the notation that Libra is a security under the law. Facebook’s chief of crypto, David Marcus repeatedly said that it would be somehow similar to Paypal in certain transactions and rule out the fact that it could be a security or exchange-traded fund.
It is logical that Facebook is denying the notions that Libra is security as it would create more hardship for the company to launch the coin under this law and Facebook’s dream of Libra could face little setbacks because of this.
In a hearing regarding the Libra and the act, Garcia was not happy with the CEO of Facebook and commented that he was “disappointed” in Facebook CEO Mark Zuckerberg’s replies about Libra.
The currency is still in its initial phase and is planned to be launched completely in 2020.
Libra was announced for the worldwide audience on June 18, 2019. Libra is created by, “Morgan Beller, David Marcus, and Kevin Weil”
Facebook’s chief executive Mark Zuckerberg had a word with lawmakers that they would not be launching libra anywhere in the world without first getting approved from United states regulators.
Facebook has decided to launch the crypto on their previously existing platforms like Facebook, Whatsapp, Messenger and Instagram as a payment method.
R3 CEO David Rutter’s comment
Rutter recently commented on Libra during a recent company conference in London that Facebook’s ambitions of entering the financial system world in which market experts have spent a decade are really naïve.
Rutter quoted that he thinks that what they did was ridiculously stupid. The way they rolled it out was their nerviness, there’s a lack of understanding.
Rutter doesn’t only stop there, he continued
“when we saw (Facebook) talking about doing a basket of currencies with weighting, in reality when we want to translate that back to real-world currencies it’s not simple… It’s naïve”.
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