July 29, 2019
New York (CNN Business) Facebook’s Libra cryptocurrency worries lawmakers. And increased government scrutiny for Libra could dent plans not only for Facebook but for other cryptos as well.
Others in the field worry lawmakers’ distrust of Facebook might prompt harsh regulations that could stunt the nascent crypto industry’s growth.
When Libra exploded onto the cryptocurrency scene last month, it brought attention to a sector that’s been growing quietly and operating without clear regulations for a decade. Suddenly, lawmakers on both sides of the aisle were talking publicly about cryptocurrency and stressing the need to regulate it: Democratic Congresswoman Maxine Waters, Federal Reserve Chair Jerome Powell, Treasury Secretary Steven Mnuchin and even President Donald Trump.
Now that Libra has captured the attention of the world — and the world’s regulators — investors and consumers of bitcoin and other cryptos are closely watching Libra as the microscope gets focused on their largely unregulated world.
“We want lawmakers to know it’s a much more intricate industry [than just Facebook],” said Kristin Smith, director of external affairs at the Blockchain Association, a group founded last year to unite and advocate for the industry. “Facebook just doesn’t have a good reputation on the Hill. We didn’t want to inherit the legacy reputational problems they have.”
Prior to the Libra announcement, the Blockchain Association had been working for months to introduce policymakers to the cryptocurrency industry — explaining how it works, its benefits and how they might effectively oversee it. The core group of lawmakers wanting to learn about the sector was growing steadily.
Libra adds more urgency to that work.