Facebook finally unveiled the details of its cryptocurrency, Libra set to be launched next year. With Libra, one will be able to buy things or send money to people with nearly zero fees, by cashing in local currency to get it, spending them like dollars without big transaction fees or real name identity and cashing them out whenever they want to.
Except that the underlying technology, the association that governs it, the wallets you’ll use and the way payments work other underlying details is what the rest of the world is yet to wrap their head around, and key financial institutions in the world are not for the idea just yet.
Among them opposing the launch are central banks globally, including the Federal Reserve of the US, who fear the adoption of the social media’s currency by its more than 2.3 billion users could disrupt the global financial system. Central Bank of Kenya (CBK) has joined these authoritative global voices against Facebook’s plan to launch officially launch Libra saying that Kenya is miles away from cryptocurrency and the risks must be assessed first.
“We are still miles away from having solutions to those things (cryptocurrency). But I know there’s a lot of interest particularly with the new product that Facebook has recently announced. That actually is miles away from any regulation, including the Fed (central bank of the US) which just recently said (Facebook’s cryptocurrency plan) needs to be paused. The risks are phenomenal and we need to understand the risks better before making a statement,” CBK Governor Patrick Njoroge said.
A number of concerns have been raised over the possible risks posed by Libra to data privacy, consumer protection and money laundering controls. Dr Njoroge said Kenya has been in touch with global counterparts under Switzerland-based Bank for International Settlements (BIS), bank of central banks, and the G20 Finance Ministers and Central Bank Governors Meeting and are working with other central banks to deal with regulations of cryptocurrency.