American, Spanish and Russian authorities consider the cryptoactive as unsafe
Since the irruption of social networks in digital economy, some banks ask for a homogeneous regulation. With the recent announcement of Facebook Inc. about launching its own cryptocurrency, Libra, in 2020, the reactions in favor and against it have not been long in coming. This time, the President of the National Securities Market Commission (CNMV) of Spain, Sebastián Albella, requested a global regulation for Facebook’s digital asset.
“From the National Securities Market Commission (CNMV) and the Bank of Spain, we hope to have regulation at European and international level, because all this new phenomenon represents significant risks of custody, money laundering, among others”, Albella told local media.
One of the reasons why authorities in the United States, United Kingdom, Russia and Spain consider this development to be unsafe is because they believe that Facebook has a lot of information about its users and their families to also manage a digital asset.
According to Albella, Libra is a cryptocurrency that represents a value, but does not fit into the parameters of cryptoactive or ICOs. The official maintains that the cryptocurrency is “interesting”, but it is not part of the competences of the National Securities Market Commission (CNMV), which is only in charge of ICOs and cryptoactives because they have more similarity with securities such as bonds and stocks, in addition to granting rights.
Countries that Do Not Accept Libra
The international community reacted almost immediately after the announcement of the future launch of this cryptocurrency. US lawmakers even asked to stop the project until Facebook representatives presented themselves in the US Congress to respond for some accusations regarding the handling of their users’ information.
Another reaction was the one of the French Finance Minister, Bruno Le Marie, who said he was concerned that the new cryptocurrency be used to launder money or finance terrorism. Le Maire even asked the central banks of the Group of Seven (G7) for a report about the Facebook project no later than mid-July.
Russia is also against Libra. This country is still debating how will be its regulation for digital assets, a rule that would be ready in two weeks. The Chairman of the State Duma Committee on Financial Markets Anatoly Aksakov, declared that the country will not legalize Libra because it represents a threat to the Russian economy.
Banks Call for “Homogenous Regulation”
Some banks demand a homogeneous financial regulation due to the irruption of big technological companies like Facebook in the sector. The presidents of CaixaBank, Jordi Gual, and Bankia, José Ignacio Goirigolzarri, said that they study the movement of the social network. “It’s a relevant movement, but very initial, there’s a lot of room left to play on regulatory matters, cybersecurity, we’ll play the game and see how everything is going”, said the bank’s Chief Executive.
However, both managers indicated that this and other means of payment need homogeneous regulation regardless of which agent is behind the operation. “The competition is good, but especially if all the competitors play with the same rules, the same activity, identical regulation”, said Goirigolzarri.
Facebook’s cryptocurrency has the support of international companies such as Uber, Visa and PayPal. Its objective would be to simplify the sending of money through the messaging service of WhatsApp, Instagram and Facebook Messenger.
Because future Libra users do not need to have a bank account to operate, it became a potential new threat for banking. They request surveillance in the privacy and use of personal data, as well as the guarantee that cryptocurrencies such as the one proposed by Facebook have enough reserves to ensure their conversion to traditional currencies such as dollars.
By María Rodríguez