U.S. Treasury Secretary Steven Mnuchin recently told reporters at a press conference that Facebook’s cryptocurrency is currently unsuitable for release. The comments come at a time when the Libra has been shrouded in questions over if it will actually be able to release in 2020.
Facebook’s cryptocurrency, the Libra, is experiencing pushback from top-level government officials today. U.S. Treasury Secretary Steven Mnuchin told reporters today that “they… have a lot of work to do before they get us comfortable.”
“Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs and human trafficking,” Mnuchin said.
He stressed that, as of now, Facebook is not ready to release the Libra.
So far, the administration has met multiple times with regulators and representatives from Facebook. Mnuchin said that Facebook issuing its own cryptocurrency is also a “national security issue,” since the company would have to implement strict anti-money laundering provisions. The social media giant also has some explaining to do over “privacy issues,” for which the Federal Trade Commission recently fined the company a record $5B.
With Libra, Facebook is trying to transition into the payments industry. Major corporate players, like Spotify and Visa, are part of Facebook’s ‘Libra Association’ and will be expected to run a node on the network, if it goes live next year. Many in the cryptocurrency industry say that the Libra will bring much-needed visibility to the rest of the market.
What many don’t know, however, is that Facebook also plans to issue a security token. The Libra Investment Token (LIT) will be a free-floating asset similar to a stock. LIT token holders will be responsible for running a node and will receive dividends. So far, there are only 100 nodes to be run by LIT holders. There has been little controversy for this aspect for Facebook’s crypto plans, surprisingly, which is good news for the security token industry.
Do you believe Facebook will be able to launch the Libra sometime in 2020, as planned? Let us know your thoughts in the comments below.
Image courtesy of MSNBC.