According to a recent blog post I read, Facebook’s Libra coin has been under severe regulatory pressure, political pressure and political pushback as well. For those of us who either live under a rock or are just arriving from Mars, yes Facebook has been working on a cryptocurrency called Libra. There was so much hype surrounding this coin las year. Facebook had a well-planned strategy of how to achieve the full potential of the coin but the news is that something is about to change. So what is it?
According to recent reports, Facebook no longer has any intentions to make the Libra token the centerpiece of its digital payment strategy. Note that, the Libra token is the Blockchain-based cryptocurrency that Facebook is creating in conjunction with the Libra Association.
The new plan is that the Libra project will transition to support government-backed monies such as the Dollar and the Euro and eventually the Libra token when it is finally completed and ready to launch. There are also reports that Facebook is delaying the launch of the Calibra which is the digital wallet that was supposed to hold the Libra coin. Apparently, the wallet will now support multiple currencies and Libra will be just one.
Facebook will no longer promote only its digital currency but use the existing ones as well. A Facebook spokesperson has had to recently clear the air, and they assured us that Facebook is still committed to the Libra project and they will definitely offer Libra within the Calibra among other coins.
The Libra project was first announced in July of 2019, as a risky yet bold step where Facebook and other partners were to create a Blockchain-based digital payment asset. Since they expected a lot of scrutinies, they launched a non-profit called the Libra Association. Some of the participating members included MasterCard, PayPal, Stride, and Visa. Unfortunately, the project was still met with swift and vocal backlash. Regulators were concerned that Facebook would manipulate the other partners since it was the main shareholder. There were also concerns about the verification and regulation of the Libra token. The issue of anonymity has remained to be a major concern, could Libra facilitate money laundering and other criminal activities. At the same time, are the user identities protected? Considering Facebook hasn’t always protected its users’ identities.
Unfortunately, towards the end of the year, several partners quit the project, due to external pressures and other personal reasons. That is what they claimed at least, but everyone knew that the main reason for this quitting was resistance from regulators.
According to the reports and statements by Facebook personnel, the Libra Association which was the non-profit founded to create the currency will continue its work.
In October, the world’s biggest economies warned that cryptocurrencies such as Libra pose a risk to the global financial system.
Facebook has always been organized, strategic and successful in most of its projects. Not to mention they are very influential and the Libra coin could be a significant coin just like Bitcoin. However, this project seems to be facing too much opposition and backlash. Let’s wait and see what is eventually going to happen to the Libra project.