Throughout the years, many forms of cryptocurrency, including bitcoin and Monero, have been accused of attracting criminal activity and terrorist funding. It seems Facebook’s new form of crypto, Libra, is now being subjected to the same accusations.
Will Libra Be Used in a Negative Way?
Facebook Coin will allegedly be a stable currency, meaning it will be tied to USD so that it is not vulnerable to the same price swings and volatility that one often sees with mainstream forms of crypto such as bitcoin. Stable currencies are often meant to bring more “sturdiness” to the world of crypto and its investors, but sometimes, they can pave the way for more questions than answers.
One such example involves tether. Recently, Live Bitcoin News published an article suggesting – based on “testimony” from a known crypto skeptic – that tether could potentially be behind bitcoin’s second price rally, which began in April of this year. As we all remember, bitcoin began spiking a few months ago and reached $5,000, a price it hadn’t touched in several months. At press time, this figure has more than doubled, and bitcoin is trading for just shy of $12,000 per unit.
While this is certainly good news, it is being suggested that tether is once again being used to push the bitcoin price and exacerbate the crypto scene. This first occurred during the bitcoin rally of 2017, when bitcoin rose to its all-time high price of nearly $20,000. The evidence was first suggested in a report submitted by Texas finance professor John Griffin, and there are worries that the same scenario is happening again.
Even though Facebook Coin is a stable currency, it is still being subjected to the same concerns as bitcoin that it will be used for illicit purposes. Several members of the U.S. House of Representatives are now questioning FinCEN – the Financial Crime Enforcement Network – about how Facebook’s Libra will potentially be utilized.
Here’s Why We’re Worried…
Emanuel Cleaver II, a Democrat from Missouri, has issued the following the statement:
We’ve seen the significant damage that foreign adversaries and bad actors have wrought on our democracy through Facebook’s platform, and that was simply through messaging and advertising. Before we allow such a giant corporation to begin processing millions to billions of financial transactions, we must study these issues and ensure we have the tools and guardrails in place to deter terrorists, extremists, and/or enemies from utilizing such a platform to do harm to our nation… Now that we’re seeing a giant corporation like Facebook – which has already shown an inability to identify and impede these kinds of actors at an acceptable level – creating its own virtual currency called Libra, it cannot be understated the importance of Congress and financial transmitters to be proactive in utilizing the newest and most powerful technologies to ensure the financial system is not being used improperly.