Bitcoin Forum

https://www.cnbc.com/2019/11/21/new-bill-would-make-facebooks-cryptocurrency-a-security-under-the-law.html


Once it is a security it is subject to all the regulations that govern securities.

Most importantly, it would be regulated by American authorities (not Swiss as Facebook wanted) if any American used Libra.

Well, obviously. When you have something disruptive to your monetary industry which offers control over other people, analogous to a religion, you would want to remove it as quickly as possible.

It's clear.

Well, facebook IS large after all. Letting them roam free with their Libra would most probably result in an overhaul because of facebooks' popularity. Plus, them being restricted by the Congress shows that they could still overpower Facebooks' reputation, making them seem more of an above person type of guy? The alpha wolf in a wolf pack. It's basically an investment by theirs that uses power as its source.

This new bill really made it difficult for Libra and the company's formation rate has been greatly reduced. If everything was controlled by the government, it would be like Libra soon. Every transaction is subject to the government and under strict examination, the company will not be able to develop sustainably. because it will happen many problems during transactions and customers will also encounter many problems in authentication. this is really a bad news!

Yes, but if I'm not mistaken bitcoin is considered a security under U.S. law, so this proposal makes sense.  In fact I thought *all* cryptocurrencies, including ico tokens, are considered securities.  Why would libra be any different?  Also if this is the extent of how the U.S. gov't plans to regulate libra, it isn't a deal killer in my opinion and I don't think this would keep it from launching.

I'm not really certain that libra would disrupt much of anything, and there have been doubts in my mind as to whether it would achieve much adoption, unless facebook *forced* it on people, requiring that they use it instead of fiat.  I don't think most people have a problem paying for things online with fiat, except the unbanked but there hasn't exactly been a groundswell of people demanding that someone create a stable coin that they can use for...whatever.

Exactly, all other payment methods like PayPal and Visa/Mastercard have a huge network effect, and they can even offer their customers some lucrative bonuses like cashback or miles. Facebook will have a hard time of getting users for their coin if it will ever get released, since they don't offer anything interesting with it - it's bad as cryptocurrency, because it's centralized, it's bad as a payment method, because it isn't convenient and well-adopted.

If that bill successfully becomes a law, I think it would most likely discourage the Libra Association from continuing the Libra project for fear of any possible issue or issues that may arise with regards to Libra's compliance on securities laws, which effectively puts the project in jeopardy since securities are tightly regulated which in effect could affect Libra operations in one way or the other.

I think its a brilliant move by the U.S. Government in an effort to try to have a certain control over the Libra project where the U.S. Government had doubts and fears on what could be perceived as a threat to its economic stability.

It's sooo, sooo obvious that the US government is doing anything in their power to stop Libra from launching, from smearing them in public to likely making some of their partners drop out, to now, where a new bill could possibly fuck Facebook over further.

It's always been an uphill battle for Libra, and I do think if this bill gets passed, it could very well be the final straw for their company, and it might be time to dump the project for another one - they tried to create something too public, and with their current influence, it would be very disruptive to the US economy.

I have to say that this law is sheer stupidity. A stablecoin is a security? How in this effin world is that possible? The lawmakers in the US are mostly out of their damn sane minds. Facebook's cryptocurrency is a stablecoin. It is nothing but a mere cryptocurrency version of their very own effin fiat money that is as useless as the one that represents it. Libra is plainly a currency. What makes it a security then?   

Well technically that proposed bill will not yet become a law until it passed the scrutiny and approval of lawmakers which could then be subjected to debates and discussions!

In fairness, I think filing that bill was very premature considering that Libra hasn't been officially launched yet in public. As such, I was wondering where did those lawmakers got the idea since I understand that Libra is technically not yet in existence and their decisions would be purely based on assumptions and imaginations!

Conversely, Facebook may have portrayed Libra as a stablecoin but such assertion is subject for debate since the initiators are mostly private business companies that the U.S. Government may classify it as a security. Interestingly, there is a framework by the Crypto Rating Council (https://www.cryptoratingcouncil.com/framework) on classifying a digital asset if it is a security or not and would be glad to see whats their take on  this issue.

I don't think it will actually get passed, it seems like a vocal section of the government that seems to despise Libra and Facebook, and I don't think it'll receive the overwhelming support that it needs to pass the bill.

It seems like a safety move, a precaution in case Libra does ever launched, and since it hasn't been passed - I get the feeling it's the government shooting warning shots and basically suggesting Facebook to just abandon the problem.

Perfectly said.

If this proposed bill is a product of lawmakers, then there is high probability that their fellow lawmakers are as insane as the authors and sponsors of this particular bill and everything will be passed, at best with some minor amendments. Furthermore, please correct me if I am wrong but the overwhelming majority in that body despise Libra and Facebook, even cryptocurrency and Bitcoin. 

This could potentially bring Libra into the market, and things would look good for cryptocurrencies as the government starts to show interest in accepting and not banning cyrptocurrencies in total. However, the bill is still a proposed one and chances are there would be opposition that would counter/oppose this due to concerns in privacy of Facebook. Still though, a good sign of adoption but too much regulation would also hurt the market.

So the focus is back to regulate what facebook started and now a new bill is proposed, these corporate big shots have the power to bend the rules if they want to come up with something and i hope this is what they will be looking and the US will have major control over the project to track each and every transaction. How these regulation and the token will come out will take a long time and by that time we will have another rally in bitcoin.

I think they do the right thing. Congress has its own reasons because a large enterprise like Libra that operates in a decentralized market is likely to cause major problems for the US economy and its neighbors. In the United States, they always control businesses very closely and Libra is really out of control of a normal business. so I have no idea unless Facebook is going to publish the internal balance sheet regularly for the SEC.

Zukerberg was arguing that as Libra was pegged to fiat currencies and was a stable coin, it was a currency. Whereas bitcoin, being unpegged to anything, was a security.

So it looks like Congress is fixing a loophole.

No one is going to use Libra instead of dollars if it is a security and you are liable to capital gains tax everytime you use Libra, but not when you use plain old dollars.

As of now,  it's still a proposed bill. If it does get passed into a law, not only it would affect Libra, but also other stablecoins in the market with operating companies under the US Government. I see some points of the initiative of such move from the US Government:

1. It does mean that the government does not want only those volatile currencies without any real asset to back its value up, thinking it's a scam material.

2. It also proves that even the US Government saw the potential of blockchain-powered cryptocurrencies, just like what China did. They're just full of pride and does not want to immediately change stance from their president's explicit disagreement on Bitcoin and other cryptocurrencies.

3. Making this move makes these cryptocurrencies tagged as stablecoins legal under their jurisdiction, and it would be up to the law's final restrictions whether Libra and other stablecoins continue to thrive (if all things go well and midway two parties), or they would just abandon that idea because the passed bill would have too much demands.

Of course most of these lawmakers doesn't have any idea on any after effect if Libra becomes operational that is why they are speculating negatively including the idea that it could create a disruption upon the U.S. dollar and could have unintended consequences along the way.

Perhaps it would be fine to assume that these lawmakers are being lobbied constantly by most financial organizations that are anti crypto so we expect Libra will receive more pressure from lawmakers.

Exactly. The real battle is happening outside the hearings and the meetings. They happened outside the peering eyes of the media. All these public hearings and televised meetings are the mere surface. Behind all these are the real battles. Rich bankers asking time from the lawmakers. Influential businessmen negotiating with them, giving them offers, some of which many of these lawmakers cannot refuse. And when they appear in front of the people and the nation, they are but mere puppets.

Why go to another bill just so the government could still control it.
They are giving Mark a lot of hard work and something to think.

There is a faster solution to it. Put it in the garbage and close it. Wait for the dump truck to take it then bury it.  ;D
They are putting too much efforts into something that could also jeopardize their financial system.

And now the government is showing its power and this is just not wielding the big stick because if they want they can completely outlaw Libra or confiscate the entire project but either way its something that needs to be discussed. The introduction of this law to me is faulty because it specifically mentioned Libra which makes it a form of target and when things are done that way in so obvious manner, the intention might have been eroded in misconception. Either way, time will tell whether Libra or the Bill have have the last laugh.

Regulation as a continuation of the act of caring for something that is potential, although disappointing in my opinion this is good. at least there must be a lot controlling libra under the jurisdiction line. I was quite curious whether the authority would be more stringent on things that were more unfavorable globally, and libra would be more profitable for the US itself.

In my opinion, the bill will definitely get passed and become part of the law. Governments of advanced countries understand the power of crypto currencies and blockchain very well but due to some insecurities and uncertainties, they have been resisting the usage of digital assets for long now. Also, their support will be with stablecoins that can be controlled but decentralized coins will get massive attention.

Even if it is a "security" they will not be out of the gate right away, there are so many rules and so forth they would have to follow and it being a securities doesn't really become overnight from what they started. So, facebook would have to make a correct decision there, I know they can make it work in 100+ countries but the important ones are like 10, if they can't do it in that 10 country that means the other 100+ doesn't mean anything to them.

UK+USA+CHINA+GERMANY+FRANCE+ITALY+SPAIN+NETHERLANDS+KOREA and maybe some other big nations, if you can't get most of those nations I am sorry but you are basically rowing for nothing and going against the tide. Whats the purpose of having 10 poor African countries for example if you don't have UK, just one UK is greater than 20+ poor African+Asian country.

Facebook is the largest network in the world. What better foundation could you build a payment network from?

At the very least, it would disrupt the remittance industry in a big way because they could offer massively lower costs than firms like Western Union.


People pay out the ass for international remittances. That's who Libra was targeting. If I used Western Union to send $100 to China right now, they would take 10-11% in fees.

Got allowed from United state with Facebook coin is not easy, how come Mark zuckerberg can resolve their problem when many Facebook user data leak out to public but he can solve in front of minister in United State, I think with Libra coin he can give some fees for United State minister to get legal using Libra there as investment way or currency digital.

I love it when you call it currency digital. You sound like Yoda. Anyway, Libra should be treated as more than just Facebook and Mark Zuckerberg. This will really mess up the way people view Libra. I think it would be best if congress will convene all those companies that gave their commitments, including those that backed out afterwards, and ask them why they think Libra is a good project. They might received some wisdom behind the reasoning of these wealthy companies. 

I am sure that Facebook's Libra will be taking in this news as something they can still work with. Libra's people are all willing to work with the USA government just to be given the necessary approval to start the whole project. Strict regulations can in fact the best of Libra because we know that just like the government this is also a centralized entity and thus has to be subjected according to what that proposed law (of approved) do entails. And with this regulation in place, we might be seeing other players also coming to the market. Once Libra is approved in the USA market, it would be easier for it to penetrate the global market. Facebook has been a very regulated social media conglomerate so it is welcoming strict regulations with an open arms and even with a smile.

That should be fine at least Facebook is restricted and under heavy regulation, they can backed it with assets because they have a lot of it, the Congress has seen everything Facebook is capable of doing, it will become a top security token in the market.
I think all companies as huge as Facebook should be considered and categorized as a security token.

America has a strange tendency to push double standards which kill american jobs, and restrict american economic growth. In sectors where every other nation in the world embraces said standards.

While the rest of the world scrambles to snatch up marketshare in cryptocurrencies and payment processors, the united states chooses to abort its own native start ups in those sectors. Guaranteeing the USA is left behind by its competition. The SEC stalled Winklevoss applications for a US crypto ETF, while europe and other nations around the world have no trouble implementing their own crypto ETF markets to boost job markets and economies. American regulators deny US traders access to many crypto exchanges and services for their own "protection". As if americans were the only country in the entire world lacking the intelligence or sophistication to utilize bitmex or another crypto exchange which allows trading with leverage. Even stablecoins like tether have banned US customers.

I don't see this move on the part of US lawmakers and regulators as being legitimate. But rather a double standard reinforcing a crooked agenda many of us have noticed over the years. Which says its ok for every nation on earth to reap economic and job growth from innovations like cryptocurrencies. But its not ok if americans wish to do the same & this should be banned or regulated out of existence to prevent it from occurring.

The US isn't "aborting start-ups".

They're just calling out stable coins, which are essentially fake cryptos. If you want the dollar, use the dollar! why add a middleman called a stablecoin pegged to the dollar, with the additional costs of "managing" it and having to hold reserves?

And if you want a cryptocurrency, then hold a genuine cryptocurrency. If you don't like the volatility then go back to fiat.

While the government is planning to pass this regulation to have a greater control over Libra, what will stop Facebook from outsourcing it to a different company and then intergrating it in thier system. I don’t think Mark is so stupid that he’ll fall for this trap, I’m hundred percent sure he’ll figure a loophole around this law.

Good sign though. And this is the thing facebook have been long currently waiting. Though it is in the way, it is still not sure on what would be the result of this proposed bill. Looking back then, government in US (if I remember it correctly) are asking stupid question about facebook stuff particularly about its own security. It just crossed my mind that, what if, they are still holding such idealism with regards to facebook and not to libra itself upon approving this bill.

As per typical your posts on this forum are pro banker and pro regulation. And so I would ask you to respond to this post, below which directly addresses your stance.   :)

https://bitcointalk.org/index.php?topic=5203099.msg53165808#msg53165808

Facebook's libracoin is a crypto start up. They're proposing it be classified as a security to kill it. As mentioned, winklevoss ETF proposals made to the SEC are a crypto start up. The SEC always kills it, while practically every nation on earth allows crypto ETFs. The SEC stepped in and killed many crypto start ups by imposing regulation making coin ICOs available only to accredited investors. Which means its only available to those who earn more than $100,000 per year.

Regulators and lawmakers create policies which affect the lives of billions and should be questioned. The US stance on crypto and other topics is a double standard in comparison to the precedents the rest of the world follow.

I'll try to make it more obvious how US policy on crypto constitutes a double standard.

The media, analysts and professionals say the US should adopt a VAT tax as european nations have it. But then european nations also legalize crypto ETFs. Why do they push VAT but not ETF. There is a double standard present.

The media, analysts and professionals say the US needs socialised universal healthcare as europe has it. But then europe also has access to stablecoins like tether and leveraged crypto exchanges like bitmex while americans do not. There is a double standard there.

Regulators and lawmakers create policies which affect the lives of billions and should be questioned. The US stance on crypto and other topics is a double standard in comparison to the precedents the rest of the world follow.

They should be questioned not just because it is the right of the people to know the reason behind each and every policy imposed on them but because most often these policies appear anti-people and pro-elites which are only a tiny minority among the billions. If crypto-related policies are to be crafted based on the honest voices of the people, the policies should turn out in favor of crypto. But since the policy-makers are limited in their actions not to earn the ire of their rich financiers, we can expect the policies to be biased.

The government have been trying to regulate the bitcoins too , they are gonna add bitcoins in the law which protects the investors against frauds , same they are doing for the libra , I think it is a bad thing to do since slowly by slowly the corruption will soon sweep in the cryptocurrencies too like the normal Fiat money but on the other hand they are not really blocking it but we should understand that this way they would become centralized till an extent and I don't know if that would work or not.
Let's see what happens.

They're useful for bootstrapping altcoin exchanges who don't have fiat markets. Poloniex, Bittrex, and Binance started that way. They can also be used on DEX platforms.

They aren't ideal but until decentralized stablecoins like DAI get decent liquidity, they serve a purpose.


Speculators gonna speculate. Taking profit or hedging means selling for fiat. Stablecoins meet that need.

Libra Association (Facebook essentially) are trying to avoid Libra as a security token categorization for a long time. If they actually passed the “Managed Stablecoins are Securities Act of 2019”, it could have awful consequences for the whole crypto industry, because all the regulation coming with.

I'm curious can't they make Libra 1 (US regulation) for the US market and Libra 2 (Swiss regulation) for the rest of the world, with 1:1 fixed rate? To avoid some of the mess with US security restrictions?

Expect tighten regulations and Bear moods.

One of the significant impacts of the coin libra is to use for their payment, and it depends on facebook how do they use it, It is better to if the libra joins with the other cryptocurrency and gives a massive impact on the market.    The libra will launch in 2020, and if the payment of these coins like in Dai, one dollar = one dai, I think it is not profitable in trading. However, still, it has a purpose on the transaction. Using cryptocurrency, you can pay now facebook for creating and improving your webpages.

given that they dont block crypto like what you said  , it makes me feel positive  . this is better than compare to they will ban cryptos just because they think they cannot do anything to control it  .

regulating crypto do also provide some benefits to like people are protected from potential crime's related to crypto use and that is of course with the help of  kyc/aml  .  beside's crypto is still a crypto after all these implementations an its still far from a real fiat .

Regulation per se is neither good nor bad. It is neutral. But it will become good if it is done properly. In the same way that it will also turn out bad if it is done wrongly. If crypto is regulated, it is only welcome for as long as it is being regulated within the correct bounds, definition, and classification. If cryptocurrency is being regulated and is defined wrongly, it will turn out detrimental instead of beneficial to the growth of crypto. It does not help.

Zuckerberg will certainly do everything according to the law and Libra will enter the top positions of the cryptocurrency market. I believe that Libra will be in that on the CMC market.

Libra is already on the CMC market even if it is still an idea. That is how influential Libra is and that is also an indication of how it could really become a very influential stable coin. It does not have a price yet nor a volume nor a market cap but it has already hit the list of the famous coinmarketcap. But now, it will be of no use because it will not be launched soon.

If the coin was supposed to release by the end of 2019, there were maximum chances that it would have created a lot of hype with countless numbers of investors. The launching is expected by April or may of 2020 I guess and by then halving is also expected. At that time market will be full of competition but right now Libra would have not faced any serious competition since bitcoin is in down phase.

And if this does pass, then FB will be in deep trouble.

Their coin is already under a lot of scrutiny already and it's hard to see that the situation would get any better with the passing of this law, which essentially will lead to many tax ramifications I'm sure will be detrimental to the long term growth of Libra.

And there is no way for them to go around it because they're a centralized entity and is prone to these types of attacks.

This is both amazing for us but also very terrifying as well. With this bill there is a chance facebook actually publishes Libra but it also means that there will be a lot of regulations and a lot of eyes on Libra and facebook will be carefully audited as well and whoever owns Libra will be notified to government as well. So there is absolutely no data that will be hidden from USA government and I am not 100% sure people would like that.

There will be a lot of people who won't mind it, hell facebook is known for getting breached and all data lost yet millions of people still use it so of course there would be people who use Libra even if that means every single cent you spent will be watched like a hawk by million different entities but is that what we really imagined when we first heard about Libra?

Facebook is releasing a new coin. Libre. We're already used to that name. But which laws will be released under. This would be an advantage in bitcoin if the Libra is officially recognized. Bitcoin can prevent Libra from dominating. There can be a great struggle.

I don't understand when people see's Libra as a threat to BTC. In my opinion, it won't be easy for Libra to just challenge bitcoin's dominance here.

And just look at the backlash in from of it. Even if they are going to be released or go production next year, still it will be a struggle and I doubt that crypto investors are simply going to shift on Libra. Each one has its own set of investors and Libra is more focus on remittance services as far as I can understand.

Many discussion about Libra coin on BTCitcoin tread because we don't know about how Libra platform when launching to public, become like cryptocurrency or not because they only give label and name with their investment and not give detail specification at the future how Libra coin are working, until today Libra not giving information about their coin continue for launching to public or not.

Whatever classification this new law will assign to Libra, it is already moot because Libra is not even in existence. Libra is not a thing for now so there is really no point classifying what is not here. Congress seems paranoid. And their classification is not going to change anything. They just want to believe what they want to believe. The rest of the people are beyond their control on what they will also believe.

It should be do CORRECTLY, because if it is not, we're the one who will still suffer in the end. Regulation must be always executed properly to prevent harm to others and for cryptocurrency to continually use and promotes. Cryptocurrency has a lot of advantages to observe because it will surely grow the economy. But first, they just need to make a security out of it.

Makes sense but in the case of Libra Coin, it will not and cannot be remove like that, Facebook has been known for it's lobbying power, their only option is to regulate it, and to impose a lot of limitations so it will become restricted, now we will know what LIBRA can do and do not once it is launch.

Characterize as security or not Facebook’s Libra could still penetrate the whole crypto market because of the platforms popularity. The regulators are just doing job and won’t make it easy for Facebook to make easy money by launching their crypto brand.

Of course Facebook is a big company and the government wouldn't just let Libra pass without them involving themselves in the said project. Government want a big tax from it. But if ever, with this strict regulations from the government, when Libra finally got launched, people might also have second thoughts using it because we know that the government is watching them.

Actually the libra coin will be a big help to their economy and its not gonna jeopardize their financial system. We are all using the facebook social media application and I think after the libra coin will be launched, more facebook user will support and buy these coin. So it will be a big helo and income to the team and also for the government

The government however will want more control over it. They are giving facebook hope for its launch which is why they didn't really kill it but will just want more laws that can hold facebook before it can control them instead. Facebook had done more damage since the last election of US which put Trump there, they are not allowing facebook to have more authority than the US gov.

Apparently, the US government is trying by any means to compromise the project and make Facebook dance to the music of the US government.  But speaking of my personal opinion, I don’t have much confidence in the Libra project, especially considering the Multiple facts of the leak of personal data of users on Facebook almost every year until today.  I can not trust the quality of this project, although the US government has completely different arguments regarding the danger of the Libra project.