It has already been a few months since the tech giant, Facebook, officially announced its ‘Libra’ cryptocurrency project with international support from big organizations including Visa, Mastercard, and PayPal. Since the announcement, very little has been heard about the Libra project apart from increasing scrutiny from regulators, bankers, and politicians all over the world.
Now, according to a recent report by the Wall Street Journal, Visa, Mastercard Inc, and other key financial partners of Libra may reconsider their involvement with Facebook Inc’s proposed digital currency. The reason cited by these financial backers behind hesitating to support Libra is that they want to avoid attracting regulatory scrutiny and, as a result, these firms have also rejected Facebook’s requests to publicly support the project. The discussions took place at a meeting in Washington D.C. on Thursday in the presence of the policy executives from Libra Association along with the cryptocurrency’s two dozen backers. Other reports separately suggest that even PayPal Holdings Inc and Stripe Inc are also undecided about formally signing onto Libra.
As reported earlier, credit card giants such as Visa, Inc. and Mastercard, Inc., digital payments organization PayPal Holdings, Inc., and ridesharing powerhouse Uber Technologies, Inc. are among the various companies that signed up with the Libra project by investing around $10 million each. The money raised by these members of the consortium has been proposed to help fund the launch of the currency in 2020. According to sources, Facebook has been able to raise as much as $1 billion in support of the neoteric cryptocurrency project.
In the words of Facebook’s David Marcus, the co-creator of Libra cryptocurrency,
For Libra to succeed it needs committed members, and while I have no knowledge of specific organizations plans to not step up, commitment to the mission is more important than anything else.
However, Facebook’s decision at this particular juncture may be a seemingly odd judgment. Although interest in Bitcoin and other digital assets was intense back in 2017, the contemporary consensus among investors has been that, by and large cryptocurrencies failed to break into mainstream use to the degree that was anticipated. Libra, though, has a leg up on other crypto offerings, owing to Facebook’s enormous user base consisting of billions of accounts worldwide.
Regulatory challenges surrounding Libra are most likely to poise strong barriers not only in the U.S. but also in other parts of the world. On top, there still remains the ongoing concern regarding the use of cryptocurrencies for scamming, money laundering, and funding of terrorist organizations.