Strengthening up the Regulatory Landscape

We can deny it as much as we want, but it won’t change the fact that humans do have a tendency to blur the lines between right and wrong at times. This is, of course, done with the help of that same intelligence we used to establish complete domination on the other species. Now, the repercussions of such a tendency can be wide-ranging, which makes for a dangerous possibility. As a way of providing a perfect antidote to all the volatility in play, we conceived the idea of governance. With everyone rigorously following the same set of rules, it was supposed to make for an environment where one could scale up only on merit, but things haven’t gone entirely according to the plan. Instead of complying with the rules, companies devised ways to skirt around them and gain an unfair advantage over their competitors. This, as you can guess, created a scenario where gaps began to reappear across the board, leaving the authorities scrambling to close them. They won’t be able to do so until they get their hands on a phenomenal creation called technology. The entry of technology into governance, risk management, and compliance sphere tipped the scales back into balance in no time. Having fulfilled the basic part of their core intention, the governing forces are now looking to focus on some aspects that have become increasingly important over the recent past, and their latest attempt at it is directed towards none other than Facebook.

After landing in hot waters for allegedly using algorithms to encourage hate speech, Facebook is now officially told by the Senate Democrats to shelve its cryptocurrency and digital wallet projects. In a letter to Mark Zuckerberg, the senate pointed out that, for now, Facebook “cannot be trusted to manage cryptocurrency.” The timing of the letter is an interesting one, as it comes just hours after the company initiated a small-scale pilot program for its digital wallet, Novi.

“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape,” wrote the senate.

The social media giant’s desire to enter the cryptocurrency market has been well-known for a couple of years. However, Facebook’s journey in this regard, staying in line with its controversial history, has been muddled with all types of questions. For instance, the company’s decision to name its digital currency Libra sparked a major pushback from the lawmakers and regulators. Since then, Facebook has renamed it as “Diem”, but the uncertainty around the currency’s future remains firmly in place.

Till the time the authorities’ stance on Diem doesn’t change, the company’s Novi wallet will facilitate transactions using Paxos stablecoin, which comes as a part of Facebook’s partnership with Coinbase.

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