Bitcoin’s share price dropped more than 10% within 24-hours after the U.S. made public criticism regarding Facebook’s new cryptocurrency called Libre Coin. It wasn’t only Bitcoin that suffered, though. All cryptocurrencies seemed to take a hit in value with Litecoin and Ethereum taking some of the biggest hits with a loss at close to 15% for both.
U.S. lawmakers expressed concerns in Facebook’s new cryptocurrency stating that development on it should stop immediately. They stated that this new cryptocurrency could be used for money laundering, remove consumer protections, and decrease market stability. Lawmakers have stated that Facebook is using its public profile to bolster LibreCoin well before launch.
Key U.S. officials have criticized concerns for cryptocurrencies in the past. They have made numerous statements stating that cryptocurrencies are allowing the dark web to thrive and that it is becoming more difficult for investigators to effectively do their job. Researchers argue that this may not be the case, pointing to a major bust where the Silk Road servers were seized by the FBI through old-fashioned investigative tactics as evidence. Likewise, other research has shown that cryptocurrencies may not be as anonymous as everyone thinks. Researchers have demonstrated that a person’s identity could be discovered through statistical attacks.
It may seem counterproductive for lawmakers to argue against LibreCoin. LibreCoin will be the first cryptocurrency to also be back by institutions. This could potentially mean that governments could have greater control and regulation of a cryptocurrency for the first time despite LibreCoin being a borderless currency.
It’s been speculated that Facebook has developed LibreCoin as a way to make mobile payments and cross-border payments much easier and more streamless for its users. Facebook has been attempting to enter the mobile payments market for multiple years now, especially in developing countries where mobile payments are the primary form of transactions. Cryptocurrencies would allow Facebook to act as a payment gateway for its users between borders to sell products and good directly through its apps. Whether current developing countries will utilize such a tool, or if markets like the U.S. and Europe are even willing to adopt a mobile payment system through Facebook, is anybody’s guess at the moment.