There have been so many reactions in the crypto space, since the biggest social media platform, Facebook, declared its intention to launch a crypto project. This rather became a threat to the long-term crusade of cryptocurrency mainstream advancement by institutional adoption.
Facebook Libra was set to rule the crypto space and probably hinder the advancement of the major cryptos like BTC, XRP, ETH, and others. This is because Facebook already has a large coverage and strong retail network.
Obviously, Facebook may not be able to go on with this plan of launching the cryptocurrency project due to the decision of the lawmakers.
A group of lawmakers, Democrats on the House Financial Services Committee, advised the social media to halt on its plan to develop a cryptocurrency-based payments platform.
A letter was written on Tuesday and addressed to Facebook, CEO, Mark Zuckerberg, COO Sheryl Sandberg, and Project Libra chief David Marcus. The subject of this letter was on Facebook’s Project Libra, it expresses the lawmaker’s concern on digital asset security, need to protect users’ privacy and frustrate hacking plans.
They urged Facebook and its partners to immediately agree to a moratorium on any movement forward on Libra.
Other Hindrances to Crypto Institutional Adoption.
Though the idea of cryptocurrency adoption by institutions has been slow, it has also been a steady process. A lot of funds have been invested into this, with a chunk of pension funds which has been deployed to purchasing liquid crypto assets.
Despite the consistent approach to move this ideology to the next level, there are still some drawbacks. The major obstacles that hinder institutions from adopting crypto are a scam, user experience, philosophy and scalability issues.
However, these challenges could be taken care of over time, but the most imminent challenge would be competition in the crypto space. Facebook Libra project would be a very strong opposition to the adoption of other cryptos.
The committee also pointed out that Facebook has about a quarter of the world’s population as its users, which will cause a lot of people to be affected if the Libra project is not properly regulated.
So the advice of the committee is that Facebook and its partners should immediately cease the implementation plan on the Libra project until Congress and regulators examine and take action on these issues.