Defections and no launch in sight – here are all the setbacks for Facebook’s cryptocurrency libra

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2020-01-22 12:05

Teodor Stig-Matz

teodor.matz@trijo.co

Facebook has encountered a lot of problems with its planned cryptocurrency libra. Here are some of the biggest ones.

Last summer, Facebook announced that it will launch its own cryptocurrency, libra. The plan is to enable easy payments and transfers of money.

In order to give libra legitimacy, Facebook has chosen to let big companies back the project. Backing libra costs $10 million, and for this, the companies get a seat in the Libra Association, the body Facebook has set up to control the future of the cryptocurrency.

Politicians critical

Despite this, libra has been met by a lot of adversities. First and foremost, politicians and other people in power are, to say the least, critical of the project.

In the US, the project has been met with scorn from the highest places. Long hearings with representatives from Facebook have been held in the Senate. In addition, the country’s President, Donald Trump, has tweeted negatively about the project.

In Europe, the project has been criticized by both central banks and politicians. In addition, Switzerland’s finance minister has said that the project will not be launched in its current form. This is significant as the Libra Association is based in Switzerland.

Several companies have left the project

As politicians have criticized the project, many of the large companies Facebook has had as partners in the project have left it.

Among these are payment giants Visa, Mastercard, and Paypal, as well as telecom-company Vodafone.

No plan for launch

Facebook is adamant that it plans to launch libra in 2020. But there seems no concrete plan for how this will happen.

“At this stage, there is no strategy set for the markets or the product, or how it will actually be rolled out”, Patrick Ellis, Libra Association board member, said in an interview with Reuters last December.

The question is whether libra will nevertheless succeed. Many are doubtful. When the crypto site The Block conducted a survey of people working in venture capital and with cryptocurrencies, about 68 percent responded that they do not believe libra will be launched this year.

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