Libra: Facebook’s currency (part 2)

by Salman Khan

Money laundering

Money laundering provisions mean a lot to you. Just as any financial arbitrator accepts a new user, Facebook will have to get different authentication information through the online form of any user who wants to access the Calibra wallet user. Photo ID issued by the government.

But since users are from the whole world, how do they access the information provided by Facebook? The same is the issue for Liberty Reserve, which is a digital currency that operates in Costa Rica and spent billions of dollars on money laundering until it closed in 2013. The prosecution then called the incident the biggest possible incident. It was the biggest money laundering in American history.

In addition to the digital currency, Liberty Reserve did the same as PayPal. This allows users to register funds and transfer funds to other users with their names, dates of birth, and email address. No attempt was made to verify the users, which led to illegal actions.

Consumers often paid this amount for a third-party exchange fee from a traditional bank without a license and mismanagement. An exchange will convert money from the source into an uncontrollable digital currency, after which it will be transferred to a Liberty Reserve account. There was no limit to the size of the operation. Liberty charges a 1% service charge for each transfer and offers to operate the shopping cart. The interest transaction is not 100% refundable.

Liberty of custody investigations was also worrisome, as the prosecution needs the cooperation of several courts to eliminate money laundering or deal with various economic crime laws. Similar concerns remain even though the library will have to accept blue-chip companies.

User protection

Facebook says damages to Calabra Wallet will be paid for fraud and account losses. But how can a big company bear such a huge loss? Facebook or the Libra Partnership Council, like other banks, will have to accept a specific level of requirements to cover the expense of such events.

Systemic uncertainty

The overall scope of the project is shrinking. Facebook has 2.4 billion users every month and WhatsApp has almost 1.5 billion users. The libra could become global in the short term, especially if Facebook benefits from its relationships with 7 million advertisers and more than 90 million small businesses. Global economic stability and military threat have serious consequences.

Libra will need a global regulation, but it is not and is unlikely next year. Will it go to the International Banking Council, the Basel Banking Regulatory Committee, the Financial Action Group, or the Financial Stability Council or the World Bank?

If these problems are solved, they will take a bad place in the Libra and become “world currency”. However, if there is no global regulatory system, the library will need strict discipline all over the world. This is an unforgettable test. We see the beginning of a big change.

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