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Libra Facebook, along with many other stable coins, can be classified as a security and subject to increased regulatory oversight.
A pair of lawmakers on Thursday introduced a law that offers strict government controls for Facebook's digital currency and similar projects.
Bill of Sylvia Garcia and Lance Goodendefines a Libra digital coin directly under the jurisdiction of the Securities and Exchange Commission, and will subject the cryptocurrency to a number of extensive and established rules. Garcia’s statement states:
Managed stable coins, such as Libra, are uniquely securities in accordance with existing law.
Facebook consistently refutesclassification of Libra as a security. David Marcus, the project manager, said at a congressional hearing that Libra had nothing to do with either securities or exchange-traded funds (ETFs). Libra transactions are similar to PayPal's digital payment system.
Zuckerberg said he would not issue a coin withoutfull regulatory approval. However, Libra’s complex structure and scale will likely depend on the sheer number of banking, securities, money laundering, and illegal finance laws that will be applied by nearly a dozen agencies and departments. And even industry-friendly lawmakers and regulators expressed concern about the potential financial impact of the project, which has already involved more than 2 billion potential customers.