Resistance from regulators around the world prompts Facebook to ‘rethink’ its plan for its Libra digital currency, it is reported
Facebook is reportedly ‘rethinking’ its plan for its Libra digital currency following sustained pressure and pushback from politicians and regulatory bodies globally.
According to The Information and Bloomberg on Tuesday Facebook no longer intends to make the Libra token. The Libra token is the actual blockchain-based cryptocurrency that Facebook is in the process of developing in partnership with the Libra Association.
It comes after significant pushback to Libra. Last August, the UK Information Commissioner signed a joint statement alongside her counterparts in the United States, Canada, Australia and the European Union, “to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure.”
That concern came after the chairman of the US Federal Reserve, Jerome Powell, in the previous month had said that Facebook’s Libra cryptocurrency project, “cannot go forward” until serious concerns are addressed.
Facebook in October 2019 said it was open to alternative approaches with Libra, including issuing multiple coins linked to different national currencies.
Now Facebook reportedly no longer intends to make the Libra token.
Instead, the Libra project will reportedly transition to supporting both existing government-backed currencies, such as the US dollar and the euro.
That said, the Libra Association will continue its work on its token, the reports said.
Meanwhile, the reports state that the separate Calibra digital wallet, which should allow anyone with a smartphone to acquire and store the cryptocurrency and then pay for various goods with it, is now expected to launch in the Autumn (rather than the summer).
But it seems this digital wallet, instead of being available globally at the time of launch, may have its availability restricted to whatever government-backed currencies the Libra project eventually supports within the app.
This restriction could slow the Calibra rollout, the reports state.
“Reporting that Facebook does not intend to offer the Libra currency in its Calibra wallet is entirely incorrect. Facebook remains fully committed to the project,” a Facebook spokesperson said in a statement given to The Verge. This referenced The Information’s initial assertion that the company was no longer planning to support the Libra token in its digital wallet.
The Information has since corrected its report.
Facebook had surprised many when it announced Libra in June 2019, and planned to launch it by June 2020.
However it did state that the launch date could be pushed back if necessary while negotiations with regulators continued.
The opposition has resulted in a number of departures from the Libra Association.
Indeed, five major payments providers have already pulled out of the currency, after Mastercard, Visa and eBay withdrew from the Libra Association in October 2019, as well as fintech start-up Stripe and payments firm Mercado Pago.
That move followed PayPal’s exit from the association, and left the project without the backing of any major payments firms.