Libra exploded onto the cryptocurrency scene last month. It brought attention to a sector that’s been growing quietly and operating without clear regulations for a decade. Thus, people question what it can bring. Will Libra help or hurt the crypto industry.
Also read: How Blockchain Technology Will Change Your Future: Part 1
Libra aims to be a global currency and financial infrastructure. Facebook built and powered by Libra. In other words, it is the Facebook version of blockchain. Facebook claims to reach 1.7 billion people who do not have access to bank accounts. A collective company, Libra Association, will run the currency.
Hurt
Libra’s appearance suddenly triggers lawmakers in many countries to talk publicly about cryptocurrency. Many of them emphasize the need to regulate it.
Long before the Libra announcement, the Blockchain Association had been doing the same thing. They have tried to introduce policymakers to the cryptocurrency industry. Lawmakers need to know how it works, its benefits and how they might effectively oversee it. The core group of lawmakers wanting to learn about the sector was growing steadily.
Lawmakers mainly concern about Facebook’s global reach can give a negative effect on the traditional financial system. Even if The Blockchain Association wants countries to regulate the crypto industry, they fear that the regulations go too far.
Also read: The Rise of IEOs amidst Crypto Growth
They are afraid that regulators get confused and generalize all cryptocurrencies. They may have the ability to tightly regulate Libra since an organization runs it. However, another cryptocurrency, like Bitcoin is run by computers around the world. Bitcoin does not have a central authority. Thus, some worry that cryptocurrency will get classified as security.
Some lawmakers concern about Libra being used for crimes. The crimes can range from money laundering to finance terrorism. At worst, lawmakers can ban cryptocurrency.
Help
On the other if the question is will Libra help or hurt crypto industry, then, Libra can attract more people to try cryptocurrency. Facebook’s massive and global reach can significantly improve the crypto industry. For instance, a person can receive Libra from their Facebook friends. Besides, they can directly trade it on an exchange of another digital currency.
