At the moment of unveiling the Libra coin and the Calibra wallet last month, Facebook informed the world that the plan was to launch the associated cryptocurrency in the first half of 2020. However, the company warned investors this week that the digital currency may never launch at all.
In its latest quarterly report, the social media giant stated, specifically in the risk factors section, that there are no guarantees that the Libra cryptocurrency “will be made available in a timely manner, or at all.” The piece of news was reported by news outlet CNBC.
A Series of Setbacks
The latest announcement comes as no surprise whatsoever, given the number of setbacks that the currency has had to comply with financial watchdogs’ regulations around the world, most notably in the United States of America, but also in specific European and Asian locations.
The social networking company recognizes the magnitude of the pushbacks that lawmakers and other regulating instances have applied, and seems to imply that they can cause the Libra coin to not launch at all in a worst-case scenario.
Several sectors around the world, most notably the US Congress and other countries’ lawmakers, have expressed varying levels of concern about potential issues with people’s privacy, specifically, Facebook’s management of user data, inter alia.
“Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue,” Facebook expressed in its filing with the Securities and Exchange Commission (SEC.) Compliance, then, is Facebook’s major hurdle towards the achievement of its project.
The document reads: “In addition, market acceptance of such currency is subject to significant uncertainty. As such, there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all. We do not have significant prior experience with digital currency or blockchain technology, which may adversely affect our ability to successfully develop and market these products and services.”
One of the heads of the Libra project, David Marcus, has previously stated that the coin will be “a more efficient, low-cost and secure alternative” payment tool for those that cannot afford to perform money transfers with more traditional means and methods.
Lots of people have directed their criticism directly at Libra, including personalities such as U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, among others. The situation has been similar in Europe, where French Finance Minister Bruno Le Maire and European Central Bank Executive Board Member Benoit Coeure have also hit the project with their comments.
Working with the Concerned Parties
A Facebook spokesperson told CNBC that the firm will work openly with all sectors that have expressed concern. “We know that the journey to launching Libra will be a long one and that we cannot do this alone. Engaging with regulators, policymakers, and experts is critical to Libra’s success. This was the whole reason that Facebook along with other members of the Libra Association shared our plans early.”
Facebook’s CEO Mark Zuckerberg stated, in an interchange with analysts, a similar sentiment. He said that, in the past, the social media network “would have probably just showed up and tried to release a product on our own.”
“Now the approach on all of these fronts is to outline the ideas and the values that we think an eventual service should have, leave open a period of however long it takes to address regulators and different experts and constituents’ questions about this and then figure out what the best way to move forward is,” according to Zuckerberg.
By Andres Chavez