Is Facebook's Libra Project Losing Momentum?
Facebook’s Libra cryptocurrency project has lost several of its prominent backers, shrinking its list of the founding members. In the last couple of weeks, PayPal, eBay, Mastercard, Visa, Mercado Pago, and Stripe as well as Booking pulled out of the project, heavily impacting the global support for Facebook’s digital currency plans.
The world started preparing for a blockchain technology and cryptocurrency revolution, when earlier this year Facebook unveiled its plans to launch a new global digital currency called Libra. The company explained that Libra would be governed by a non-profit association supported by several major companies and organizations, beefing up its credentials.
However, since the controversial announcement, cryptocurrency community as well as regulators and central banks have been examining Libra’s potential effect on the global financial system. Many have expressed their concerns that Facebook’s user privacy protection issues that have been scrutinized in the last few years could spill over onto Libra, even if it is a legally separate entity. Many took a stand and warned Facebook against the launch, asking it to postpone it and making it clear that they are skeptical of the largest global social network’s plans.
What Does This Mean?
The departure of the top payments companies shrinking the Libra Council to 21 members could have a detrimental impact on Libra’s ability to gain trust and momentum going forward. After all, strong partnerships are often considered key to project’s success. Yet, despite the high-profile defections from the project and continuous intense criticism from politicians, regulators, and central banks around the globe, Facebook continues to move forward with its digital currency launch plans.
The Libra Association officially welcomed the remaining 21 member organizations to the Libra Association Council on Monday, October 14 in Switzerland. Although the project’s scrutiny continues, venture capitalists and multinational telecom, fashion, music streaming, and transportation companies continue to support it. In addition, NGOs and the academia remain loyal and involved. Organizations, such as Kiva that offers crowdfunding loans to the underserved populations around the world and Women’s World Banking, a microfinance organization helping low-income women gain access to finance, are sticking around with the hope that Libra will help reduce the world’s unbanked population. The final outcome remains unclear – there is plenty of campaigning, work, and challenges for Libra ahead.