Facebook's Libra currency is in trouble as partners get cold feet
posted Friday Aug 23, 2019 by Scott Ertz
The announcement from Facebook earlier this year that they were working on launching a cryptocurrency called Libra immediately drew scrutiny, from other companies and governments the world over. It seems that Facebook, their subsidiary Calibra, and the other members of the Libra Association hadn't considered the possibility that there could be concerns over the platform before the announcement. Now, because of the backlash, the Financial Times reports that members of the Association are getting cold feet.
Two of the 28 founding members are considering leaving the Association entirely, for fear of getting tied up in Facebook's messes. It all stems from the inevitable regulations that will be implemented by the governments that don't ban Libra outright because of Cambridge Analytica. Many governments fear that the company's handling of a privacy issue that they were aware of more than a year before news broke on their behavior could be replicated at Libra. Others are worried that the tight ties between Facebook and Libra could cause problems for the value of fiat currencies, including the US dollar.
With increased scrutiny on Facebook, the associated companies are worried that being involved with Libra could bring problems to their businesses. One of the two companies considering exiting the Association is worried that their business will be put under a brighter government spotlight, while the other is concerned about increased regulation involving their own business, all because of their connection to Facebook.
On the other hand, it seems that Facebook is getting annoyed with the way things are going, as well, but for different reasons. Facebook is concerned about the fact that they are the only ones publicly speaking positively about the currency, despite everyone committing to promote the program. It is not a surprise that no one wants to talk about the program, however, for fear of retribution. With these issues, it is unlikely that Facebook's goal of a 2020 launch or 100 members of the Association will be hit.