In light of increased regulatory criticism and pushback regarding its Libra cryptocurrency offering, Facebook has hired yet another lobbying firm to ease lawmakers’ fears and pave the way for a successful launch.
The firm, which specializes in regulatory compliance and public policy, is the latest addition to Facebook’s cadre of lobbyists and has tapped partner and former Coinbase executive John Collins to spearhead Libra’s network lobbying efforts in Washington.
The move is expected to help the social media giant mollify legislators’ fears about its objectives. Notable politicians, including U.S. President Donald Trump, have voiced their misgivings about the project.
In July, Trump asked Facebook and its Libra cohorts to seek banking regulatory compliance if they wish to become a bank. This was via a tweet that read as follows:
“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National.”
Such a move would allow the project to fall directly under the U.S. government’s regulatory control.
Former Coinbase exec John Collins will be at the forefront
The FS Vector team will be led by partner John Collins and will be expected to submit four updates concerning state proceedings by the end of each year.
Collins previously served as Coinbase’s Head of Policy before departing in 2016 for a new position as the Vice President of International Policy at the Bankers’ Association for Finance and Trade (BAFT).
He has also been involved in national policy matters as a Senior Professional Staff for the U.S. Senate Committee on Homeland Security and Governmental Affairs.
A Few Setbacks
Facebook’s Libra project was announced in June and has been making headlines since. News of the endeavor is believed to have led to the Bitcoin price spike that saw rates rise momentarily past the $10,000 mark to just over $12,000.
Prices dropped sharply after the first Senate Banking Committee hearing that took place in July.
A collective of skeptical legislators lambasted the project subsequently dashing the hopes of many enthusiasts and investors. BTC lost about 10 percent of its value within the next 48 hours.
The Facebook Libra project aims to bring money transfer convenience to the masses and will rely on a basketcoin setup which will allow easy conversion of currencies at stable rates.
The dream of a cheap, borderless payment network is what Facebook says it wants to achieve through the venture.
One of the main concerns among anti-Libra crusaders is that allowing Facebook to handle personal user data of over 2 billion people, distribute social information via its platforms, as well as control personal funds would inadvertently allow malicious entities to weaponize the system.
Major Hurdles Ahead
The Libra platform has major regulatory hurdles to overcome. Complying with sovereign statutes is one of them. Countries such as India are already taking legislative steps to ban cryptocurrencies altogether.
Money laundering is another major issue. The scourge has plagued the cryptocurrency sector since its advent.
Facebook has, however, said that each Libra Association member will be able to reinforce related measures via a node setup.