Facebook’s proposed cryptocurrency dubbed ‘Libra’ generated a lot of hype and optimism in 2019 with Bitcoin rallying to $14,000 off the back of the announcement.
However, for all of the hopefulness that Libra brought to the cryptocurrency market, it came along with a heap of scrutiny and scepticism from regulators and lawmakers.
Facebook founder and CEO, Mark Zuckerberg, was grilled by the US House of Representatives during a hearing on Libra in October, with questions being put forward on the decision to base in the company in Switzerland instead of the United States.
House representatives claimed that Libra could become a tool for money launderers and criminals, using examples of how Bitcoin became popular after the inception of the Silk Road.
We've said from the beginning that Libra shouldn’t and wouldn’t launch without the appropriate regulatory oversight and addressing legitimate concerns. Every time someone agrees with us, it doesn’t constitute a “blow” or “setback.” Innovation and regulation can live in harmony.
— Libra (@Libra_) October 15, 2019
Zuckerberg replied by revealing that state-of-the-art KYC and AML procedures will be implemented to combat the potential use case in crime.
According to a report by Central Banking, Libra has adopted a change in strategy that would see it offer digital versions of government-backed currencies as well as its own token within the wallet.
This move is to seemingly appease the critical governments who see Libra as a threat to the US Dollar.
Libra to launch during the perfect storm
Once regulatory approval is achieved, Libra could well be launching at an ideal time with the economic environment in turmoil amidst the coronavirus outbreak.
Global equity markets have tumbled significantly over the past month, as have currencies like the US Dollar, which could turn people towards alternative banking solutions.
The ease in which Libra could be transferred across the globe with minimal fees could serve as a key selling point for consumers.
Concerning news coming out of Italy this morning. Is a $700bn bail out on the cards?
— Oliver Knight (@KnightCoinRivet) March 11, 2020
With an impending bail out to reduce the impact of coronavirus on global economies seemingly on the cards, public distrust of banks could spike as it did in 2008, which coincidentally caused the creation of Bitcoin.
Use of Facebook is expected to rise as coronavirus cases rise as more people will be working from home and communicating with family.
This is why, if the implementation of Libra within the social media platform comes into place this year, it could be perfectly timed with families needing to transfer capital across the world.
It may also cause an increase in interest towards cryptocurrencies in general, which could prompt another bull market.
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