Economy

Facebook Responds To US Senate Questions On Libra

Facebook Responds To US Senate Questions On Libra

The announcement of Facebook's crypto project Libra, was heralded with great fanfare except in countries such as India and China.

"If the digital currency is closely associated with the USA dollar, it could create a scenario under which sovereign currencies would coexist with US dollar-centric digital currencies".

While India hasn't acknowledged Libra and what it will entail, the anti-cryptocurrency regulations are still frustratingly vague.

Facebook has had discussions with various governments on both the Libra cryptocurrency and the Calibra digital wallet. According to Libra's whitepaper, it will be linked to major payment gateways and governed by a Switzerland-based non-profit consortium, the Libra Association.

Ever Since Libra was unveiled, it has attracted the attention of several people, from analysts to the US Congress, regulators and most recently, the Asian giant, China.

Just past year the Reserve Bank of India banned all financial institutions under its regulatory ambit from offering services to crypto-related businesses. As a cross border protocol, Libra can be used for lending and even disrupt sovereign monetary policy by eroding the government's power over the money supply.

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Indeed, the major debate in the Democratic Party is said by the media to be how "moderate" their presidential candidate should be. She said Biden's experience working alongside Obama is a big reason she may support him in 2020: 'I love that'.

Mu said the central bank's research team tested Libra's code and found it's "still in an initial stage and the quality of the code isn't stable". The PBOC is now apparently working with market institutions to bring the CBDC to fruition.

And with Facebook having stated that one of the goals of Libra is to enhance access to financial services for the unbanked, being locked out of India would deny Facebook the second-largest market in the world, by virtue of the unbanked population residing there.

Peking University launched a new program on Monday called Open Research Initiative of Digital Finance to provide a research platform for innovation in digital financial products.

However, China can not make such a regulation.

China's monetary authority identifies the nature of digital currency as "a substitute for cash", rather than a speculative instrument, according to the central bank.