If you are not aware of what the Libra project is, I invite you to look at our analysis of the whitepaper.

Following the request last week from the American Congress to slow down the progress of the Libra project, we learn today that it has filed a moratorium on Facebook in order to stop all development of the project (at least temporarily).

In a letter dated July 2 to CEOs Mark Zuckerberg and David Marcus, legislators called on Facebook and its partners to accept a moratorium on the development of Libra and the dedicated portfolio, Calibra.

The committee considers the project to be an entirely new global financial system that wants to compete with US monetary policy and the dollar.

They believe that the Libra could have serious repercussions: “This raises serious privacy, commercial, national security and monetary policy concerns not only for the more than 2 billion Facebook users, but also for investors, consumers and the global economy in general”.

The letter also expresses its deep concern about privacy and national security issues that may be caused by cyber security vulnerabilities. The committee adds that Facebook’s passive handling of private data exacerbates their concerns.

In addition, the letter argues that: “If these products and services are poorly regulated and insufficiently supervised, they could pose systemic risks that threaten financial stability in the United States and around the world”.

They add that: “If we do not stop implementing before we can do so, we risk a new financial system based in Switzerland that is too big to fail”.

There is a real fear of governments, and in particular the American government, which is becoming aware of the power Facebook can have over Libra.

The feedback from the legislators on this issue is therefore very much awaited to find out what happens next.

Mr. Stiglitz, Nobel Prize winner in economics, notes that in just a few years, Facebook has acquired a level of mistrust that has taken the banking industry much longer to reach. He is concerned that this new cryptocurrency will be used for illicit activities and money laundering.

However, it also acknowledges that the current financial system poses a real problem, in particular the lack of competition, which results in consumers paying much more than the actual cost of their payment.

Meanwhile, the Governor of the Central Bank of Japan, Haruhiko Kuroda, added that he intends to “closely monitor” the increase in the acceptance of cryptomarket payments and its impact on financial stability.

So, who do you think will win this battle? Governments or the world’s largest social network?

To be continued.

Florian Rézeau

Entrepreneur | ICO Advisor | Writer

Passionate about high tech and IT, I’m marketing and communication consultant for multiple companies and writer about the Blockchain and Cryptocurrencies