The Facebook Libra cryptocurrency project is facing pushback from Indian lawmakers. According to Economic Affairs Secretary Subhash Garg, the firm’s digital currency is privately-controlled and this fact alone makes the government particularly distrustful and unlikely to approve its use within the country.
The Reserve Bank of India has already prohibited financial institutions from dealing in cryptocurrencies. An inter-agency committee was also recently reported to be working on a bill barring Indian citizens and businesses from possessing, mining, or trading in crypto.
The news comes at a time when Facebook is trying to mollify legislators that are skeptical about its private user data collection practices, especially in regard to its yet-to-be-launched Libra network.
The company is believed to have been betting on the Indian market to catalyze Libra adoption, at least initially, before its attempts were squashed.
The U.S. Government Is Skeptical About the Facebook Coin
Legislators in the United States are also wary about the potentially disruptive Facebook crypto project. Last week, the Federal Reserve chairman, Jerome Powell outlined a series of concerns surrounding the Libra cryptocurrency.
He said that the digital currency had the potential to destabilize the economy, cause large-scale data privacy issues and aid money laundering activities.
The widely publicized statement caused bitcoin’s value to plummet by approximately 12 percent within 24 hours.
According to Scott Galloway, a Professor of Marketing at the NYU Stern School of Business, there is good reason to be worried about Facebook’s cryptocurrency.
According to the analyst, Facebook’s foray into the remittance market would give the company too much power over people’s lives and there is a danger in allowing this to happen.
In his view, the company already controls the media and the narrative in a lot of social issues. Enabling the social media giant to also control money would inadvertently allow it and malicious third party actors to weaponize its platforms.
U.S. President Donald Trump has also added another twist to the regulatory debacle. Going by his latest tweets on the matter, Facebook and Co may be forced to register the Libra Association as a bank that operates under U.S. banking statutes.
Adding to the company’s woes, the Federal Trade Commission (FTC) has just approved a $5 billion fine resulting from its 2018 data handling scandal. There are also reports of a planned law that will prevent large tech companies such as Facebook from dabbling in digital asset ventures.
According to a just-released Reuters report, the House Financial Services Committee is currently drafting a bill that includes a fine of $1 million a day for firms found to have violated the rules.
The document apparently describes a large tech company as an enterprise whose annual revenues exceed $25 billion.
(Featured Image Credit: The Washington Post/Getty Images)
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