US Congresswoman Vows to Brand Facebook’s Libra a Security

The Libra Association is now considering offering stablecoins backed by a single national currency in addition to its coins guaranteed by several currencies. A congresswoman said she would continue to work to make Facebook’s Libra security.

17 April, 2020 | AtoZ Markets – Facebook’s cryptocurrency project is taking a new, more modest approach. Transactions become more and more online during the coronavirus pandemic. Libra Association is an independent group organized by Facebook to manage the Libra cryptocurrency. It said it now plans to offer stable coins backed by a single national currency in addition to its coins guaranteed by multiple currencies. This means that certain coins offered by the group would serve as a value equivalent to a US dollar or a euro, for example. The move comes after lawmakers around the world rejected Facebook Libra plans.

Libra May Have to Deal With the SEC

Rep. Sylvia Garcia (D-Tex), member of the House of Representatives’ Financial Services Committee, who questioned Mr. Zuckerberg at a hearing about Libra last year, does not seem entirely convinced by the new frame. She said she would continue to work to make Facebook’s Libra a security.

Garcia contends that the new version of Libra still derives its value from a basket of currencies. Libra Association may change it, making the value of the coin dependent on the work of a third party. She reiterates that such a token should report to the Securities and Exchange Commission:

“Facebook and the Libra Association had the opportunity to respond to the concerns that my colleagues and I raised with their first white paper. Unfortunately, they have chosen not to listen to the bipartisan concerns raised about the Libra. I will continue to work to ensure that the SEC regulates any asset such as the security that it is under current securities laws “.

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Sylvia Garcia denied that recent updates to the Libra whitepaper have substantially changed the security status of stable coins that have yet to be released. In November 2019, Sylvia Garcia introduced the “Managed Stablecoins are Securities Act of 2019”. Garcia sits on the Parliamentary Financial Services Committee. Rep. Garcia’s announcement follows on from the Libra Association’s announcement this morning. However, the organization has taken steps to appease regulators in its new white paper on the Libra token.

Facebook is now awaiting regulatory guidance from the Swiss government. Libra also said that it had started the process of authorizing payment systems with the Swiss Authority FINMA.

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