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Facebook's Libra Faces Massive Challenges from Foreign Governments
Is Libra Going to Be Banned in China and Russia?
Facebook's Libra was announced to mixed fanfare last week. Big tech's first venture is at a rocky start at best. Saying that many in the cryptocurrency community seems to dislike the project is an understatement.
Recently a parody cryptocurrency project was released called ZBUX was released. Their sole mission is an attempt to overcome Libra's market cap & tagline is: "Why wait for LIBRA when you can throw your money away TODAY?" While this is a hilarious parody, it is unlikely to ever compete with Libra. It does however show the sentiment of the cryptocurrency community. Luckily Libra's target audience is not Bitcoin maximalists or hardened traders, but average individuals.
Russian & Chinese Potential Ban?
Regulatory woes seem to come not only from home, as Congress's banking committee have scheduled a hearing on Facebook's cryptocurrency on July 16th, 2019. Foreign governments also seem very wary of the project.
The Russian government have announced that they will not legalize Libra in an
"Russia will not legalize the use of Libra cryptocurrency, which Facebook plans to introduce into circulation in 2020. This opinion was expressed by the chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov, in an interview with the radio station Kommersant FM on Tuesday."
One may assume that this Russian potential ban may not mean much for Libra. Facebook is not a common social media website there as VK is the dominant social media giant for Russian speaking countries. That and Russian traders will likely be able to only have an issue with Libra when converting it to fiat, something that can be overcome by converting it to Bitcoin.
China might also poise some regulatory hurdles on Facebook's Libra. In the past, Chinese regulations have had a deep effect on global cryptocurrency markets. As reported by the South China Morning Post, China has been planning a "sovereign" digital currency of its own for a while. Libra might be seen as a form of competition to that "sovereign" digital currency. In addition, Facebook, Instagram & Whatsapp are banned in China.
The Bottom Line
Facebook's Libra will perform just fine with US, European & the developing world's markets. Seeing that Facebook has more than 2 billion users, it will likely take a spot in the top 10 cryptocurrencies by market-cap at launch. With Facebook's legion of lawyers and litigators they will likely take on and beat regulators in the west and possibly the east.
All things considered Libra should be admired by cryptocurrency traders and fans. While it might not be decentralized and Facebook's history isn't stellar, they are waging war with the regulators. Moreover, it will introduce millions more to the world of cryptocurrencies & Bitcoin.