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