Facebook’s announcement of Libra, its soon-to-be launched digital currency, is bringing significant attention to the growing crypto revolution, none more so that in the halls of the United States Congress. Although there is plenty of debate to be had over whether or not Libra is a true cryptocurrency, there is no doubt that its creation is a wake-up call to America’s leaders that have thus far chosen to pay little attention to the development of blockchain assets. Now, with the world’s largest social media company about to enter the space, the emergence of electronic alternatives to the U.S. Dollar can no longer be ignored.
This week both the House Financial Services Committee and the Senate Banking Committee held hearings examining the Libra project. David Marcus, Libra’s chief developer, testified at each. Marcus was, to put it mildly, speaking before a hostile crowd. House committee chair Maxine Waters (D-CA) is already on record as opposing the digital currency. Her office recently proposed a bill, tentatively titled the “Keep Big Tech Out of Finance Act,” that would effectively bar Facebook and other large technology companies from creating cryptocurrencies. There is equally open disdain for Libra in the Senate.
Facebook has made clear its intention to work with federal regulators, and ensure that Libra follows all relevant laws. Nevertheless, its move into the financial sector has signaled its intent to take on the most powerful tool at the government’s disposal: the ability to control the nation’s money. Also, Libra’s development is a sign that Silicon Valley is coming after the banking industry, which is by-far the most powerful interest group in Washington.
Bitcoin and other decentralized cryptocurrencies have, of course, represented the same threat to the status quo for ten years, but until now members of Congress have been able to treat traditional blockchain assets as little more than a benign nuisance. No-doubt most members of Congress are familiar with Bitcoin, but it is safe to assume that very few can explain how it works, or yet fully grasp its revolutionary potential. Facebook, on the other hand, is an entirely different matter. The social media juggernaut is far too powerful, and wealthy, to be ignored, and its ability to disrupt is obvious.
Waters and other members of Congress will soon realize that Libra is only the tip of the digital currency iceberg. Their hostility toward it is certainly understandable, yet at least Libra is the product of a U.S.-based company that is willing and able to follow the established financial rules of the road. This fact is far from the case regarding truly decentralized blockchain assets such as Bitcoin, Ethereum, and Monero. Simply put, the threat of these platforms to the U.S. government’s hegemony over how money is created and used is vastly greater than Facebook’s centrally managed stablecoin.
Facebook’s bold move is proof positive that cryptocurrency is no longer a fringe element of the global economy. Realizing this fact may be a very hard truth for America’s lawmakers to accept, but they now have no choice. To understand the true extent of the revolution underway, perhaps these men and women should learn more about IBM’s adoption of Stellar for Blockchain World Wire, or Walmart’s partnership with VeChain. The House Committee currently examining Libra has five members from Texas. They may be interested to know that Austin, their state’s capital, is now working with the Iota Foundation.
Even if it receives regulatory approval, Libra is far from guaranteed to succeed as a digital currency. Nevertheless, win or lose, Facebook’s foray into the crypto space has served to shine a spotlight on an issue that most of the U.S. Congress would like to overlook. Moving forward a much greater interest in cryptocurrencies, and the technology behind them, will soon be taking place on Capitol Hill.