The SEC's long-standing decision not to approve Facebook's Libra cryptocurrency has resulted in volatility. Nonetheless, uncertainty seems to grow after Facebook top honcho Mark Zuckerberg expressed his doubts over how the virtual currency will succeed.
On June 18, Facebook made quite a noise: it declared that its own electronic money will be released next year. The announcement led to a major crypto rally as bitcoin prices hit the $13,900 benchmark.
Though not so sure about the sustainability of the crypto, Zuckerberg "wanted to reassure" state regulators that the social network company would not be amenable to any attempt by the bitcoin community to release the digital currency until Facebook had complied with all US regulatory requirements.
Policymaker-pressure is not surprising to digital currency investors. So far, the Securities and Exchange Commission has not given the green light to any proposal to introduce an exchange-traded fund on cryptocurrency.
The SEC said it has doubts about electronic currency's unpredictability and price swings of bitcoin-related assets. Based on a Reuters report, bitcoin can be used without government intervention, or any central authority, like banks, to transact money faster and anywhere in the world.
Facebook is not getting any good treatment for Libra. The company and its proposed blockchain have suffered a dwindling month as investors bolt out of the campaign, specifics begin to shift and legislators broaden their criticism of the ambitious plans.
The issues hit a crescendo on Wednesday when a powerful US committee set up Zuckerberg, presenting Libra as proof of what they saw as the cavalier attitude of the organization towards everything from data breaches to false political ads.
For the Facebook big boss, who went through 6 hours of grueling inquiry, the day just grew more difficult. Lawmakers expressed doubts about the firm taking control of the Libra in Switzerland rather than in its own soil -- as well as what will lead to the Facebook data gathered on users of Libra.
Republican-California congressman Brad Sherman named Libra a "strong hacking device." Democrat-New York congresswoman Nydia Velázquez related to the early battlecry for Facebook to "move fast and split."
Zuckerberg, who succeeded in keeping his cool even as lawmakers interrupted him repeatedly, stuck to his points. Libra, he said, would allow the unbanked world to join the financial system. And in cryptocurrencies, the US needed to lead, he said, referring to American nationalism, instead of ceding the field to China.
