In a further show of support for Facebook’s crypto asset Libra, the Winklevoss twins waded into the discussion by giving their backing to the much-maligned project. Despite their chequered history with Mark Zuckerberg, the twins believe Facebook’s standing as an established tech company would be beneficial to crypto as a whole.
This comes at a time when Libra is facing open hostilities. Not least from political opposition, such as the French Finance Minister, Bruno Le Maire, who flatly condemned the project by saying it must not happen. Similarly, European Parliament member, Markus Ferber raised concerns over its potential to become a shadow bank. Whereas Bank of England Governor, Mark Carney holds a more amenable view, citing benefits to do with cross border efficiencies.
Libra executives likely expected a backlash. But the scale of opposition means they are now cutting back on their original plans. As such, it’s reported that Libra will exclude the Indian and Chinese markets.
The world’s largest social media company, @facebook has no plans to launch its “cryptocurrency” #Libra in India. https://t.co/IfPEUd2p9s
— NEWSBTC (@newsbtc) July 10, 2019
Winklevoss Twins Support Libra
Following the official launch of their whitepaper in June (since removed,) the Libra project has attracted a chorus of conflicting reactions. However, the Winklevoss twins have gone on record to say Libra will be good for crypto. In an interview with CNBC, they drew attention to Facebook’s influence by saying:
“[Libra] is very positive for crypto, a company the stature of Facebook talking about crypto currencies demystifies the word and makes people feel a lot more comfortable.”
And when questioned on how Facebook should approach lawmakers, ahead of its Senate Banking Committee meeting on July, 16th, the twins said:
“Work with regulators. Talk with them. You know, we definitely went through the front door, and we tried to educate the regulators and shape the regulation in a thoughtful manner because if you get the regulation wrong it can stifle innovation. But the right regulation allows for innovation to flourish, and we think we have achieved that right balance with New York.”
And while US authorities are progressive enough to discuss the matter, not every country is as openminded. Indeed, with draft proposals to criminalize crypto trading, India stands out as one place where Libra would not be welcomed.
Loss Of Central Bank Control
The raft of anti-crypto sentiment from the Indian government means their opposition to Libra should come as no surprise. Speaking on the matter, Economic Affairs Secretary, Subhash Garg said:
“Design of the Facebook currency has not been fully explained. But whatever it is, it would be a private crypto asset and that’s not something we have been comfortable with.”
Facebook responded by rejecting the roll out of Libra in India. According to Bloomberg, a Facebook spokesman said:
“There are no plans to offer Calibra in India. As you may know, there are local restrictions within India that made a launch of Calibra not possible at this time.”
But more than that, Libra’s stab at a global payment system has forced governments around the world to rethink. On this point, Facebook co-founder, Chris Hughes, sees the rise of Libra as a frightening prospect. In his piece for the Financial Times he wrote:
“Libra will disrupt and weaken nation states by enabling people to move out of unstable local currencies and into a currency denominated in dollars and euros. And managed by corporations. The fewer rupees or lira a country’s citizens hold, the less power the national central bank has to set monetary policy. Making it harder to stimulate the local economy in times of economic stress.”
With that in mind, the power shift from governments to corporations is a real possibility. And with the prospect greater globalization, are the Winklevoss twins fully prepared for what might be?