US, Canada, Australia, and the EU concerned about the privacy risk which Libra allegedly poses
There are still doubts as to how Libra, Facebook's digital cryptocurrency, shall be rolled out due to the many controversies surrounding its use. The major concern is the privacy of its users given that Facebook is a social network platform with quite a huge following across the world.
Though the Libra project has been backed by a number of companies such as Visa, Uber, and MasterCard, a number of governments are reluctant in giving it a green light. The governments say that they have a shared concern about the privacy risks that Libra poses. This is most likely in line with the growing concern over the threat of the so-called blockchain privacy poisoning, which happens when personal data are being inserted into a public blockchain, thereby rendering the latter non-compliant under the recently adopted General Data Protection Regulation (GDPR) due to the fact that data stored in any blockchain is immune to alterations and can't be deleted.
It is worth noting that the European countries are also struggling to implement GDPR in blockchain projects, due to their very nature. The regulation seeks to protect European citizens against data breach. However, it is yet to be fully agreed as to whether to categorize the public and private keys used in blockchain networks as personal data or not. According to GDPR, European citizens have the right to have their personal data deleted from networks if they feel it is a threat; however, this is impossible with blockchain networks and it will remain so even with Facebook's blockchain network where Libra will run.
The fears are that there is a likelihood that Facebook may combine the large reserves of personal information in its custody with the financial information and cryptocurrency thus amplifying the privacy concerns.
The UK was the latest country to air its concern about Libra's privacy. It joined a league of other nations such as Canada, Australia, USA, and the EU.
Disruption of the banking industry
In addition to the privacy risk, the US regulators also fear that Libra poses a great threat to the banking industry given its cross-border nature. Experts actually anticipate that if Libra shall be successful, it shall be the world's most used digital currency due to Facebook's vast user base.
It is anticipated that its adoption could be far bigger than this of Bitcoin and Ethereum, which are currently the leading cryptocurrencies.
Facebook will have to wait for the US congressional committees to give the necessary regulatory approvals, addressing various supervisory issues.
However, it is still not clear as to whether Facebook will need this approval, especially due to the fact that the company tasked with developing Libra is stationed in Switzerland. Facebook must have foreseen this challenge when choosing where to register the company.
Nevertheless, since Facebook's founder is a US citizen, the company may have to wait until it receives the appropriate approvals from the congress. It is also worth noting that the US provides a very big user base.
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