One of the reasons why regulators tend to have a hard time regulating technology is because of the pace at which the tech world operates. By the time regulators find out what has to be done with a particular technology, things get evolved so much that the regulations formulated by them become less powerful than they would have been some time ago. The same is happening with Libra too – while regulators try to determine what to do with Facebook’s Libra cryptocurrency, the development related to it has kickstarted not just in the United States but also in many other countries around the world.
Everybody knows how important it’s going to be for Facebook to prevent the usage of Libra for money laundering. Regulators have already made it clear that even if they allow Libra to be launched, the cryptocurrency will be subject to the highest regulatory standards. Developers who have joined Libra ecosystem also understand this, and therefore work on some anti-money laundering tools for Libra has already begun. Pawel Kuskowski, the CEO of UK-based regulation technology company Coinfirm, recently spoke to Forbes magazine regarding AML tool that they’re building for Libra. And here’s what he told:
“We need to be prepared from a technology perspective in order to be able to provide an anti-money-laundering solution for this kind of new thing which is coming. This is how we maintain our competitive edge.”
Coinfirm has integrated the open-source testnet of Libra available on Github with its platform. The company has also committed one of its permanent employees along with two part-time supporters to work on this new AML tool. Currently, they’re trying to understand how transactions on LIbra will work, and what may be the possible patterns associated with them in future. This information will then be used to develop algorithms that can work to prevent the use of Libra in money laundering.
Block explorers are the other interesting category of tools being developed for Libra. Block explorers are for blockchains what Google is for internet – they help in searching for any particular information across the blockchain. One of the block explorers under development right now is Libra Browser, which is being developed by the First Digital Asset Group of Israel. Here’s what Gal Diskin, the CEO of First Digital, told Forbes magazine about Libra Browser:
“Currently it is slow, ugly, unstable and functionality is limited to viewing the latest transaction or a specific account. But it works and is useful to the developer community.”
Based on these comments it’s clear that First Digital is committed to making it much more sophisticated as a block explorer in the future. At least three other block explorers are also being developed, namely Libexplorer, Libranaut and Libraview.
Now, this is the most interesting aspect of Libra-related development. According to community.libra.org, developers in many countries have established their own block explorers to develop various tools for Libra. Hong Kong, Canada, Japan, Indonesia, South Korea, Vietnam, Ukraine and our own country India are the countries where open-source testnet of Libra based on native fiat currencies have already gone live. A forking process similar to this one during the early days of Bitcoin led to creation of alt-coins. Today history is repeating itself.
So, can governments really stop the development of Libra?
While Facebook has assured the regulators that it won’t launch Libra until regulators are fully satisfied, I don’t think that any government in the world is right now in a position to stop the development of Libra. One doesn’t need to be a member of Libra Association for building something related to it, which is why it’s very difficult for the governments to put a full-stop on its development. Anyone can go to Github and fork a version of Libra blockchain for his/her own development needs. A million transactions have already been conducted on this blockchain – and that is only when it works as a dummy blockchain network – it has no assets backing it right now, and it can’t be used for real-world transactions. This shows how robust support it has received from the developer community.
Clearly, grilling a member of Facebook management in the Senate is not enough for the regulators. They gotta speed up their ballgame to keep up with the pace of technology.