In June of 2019, Facebook announced the launch of Libra, a global financial network that it described as “a simple global currency and financial infrastructure that empowers billions of people.”
The network–which was originally slated to be launched within the first half of 2020–was to be supported by the Libra Association, an organization comprised of at least one hundred corporate backers who would act as the network’s nodes.
However, the project was the focus of quite a bit of pushback–just over a month after the project was announced, David Marcus–one of Libra’s co-creators and the head of Calibra, Facebook’s wallet platform for Libra tokens–was being grilled by both the United States Senate and the House of Congress.
The United States wasn’t the only nation to take aim at the project. Bloomberg reported in August that antitrust regulators in the European Union had begun probing Libra. In December, finance ministers in the EU agreed that private digital currencies like Facebook’s Libra should not be allowed in the European Union until the risks they could pose are clearly addressed.
And indeed, David Marcus had already agreed in July that Facebook would not launch Libra until the project had “fully addressed regulatory concerns.”
Eight months after the launch of Libra was originally announced, it’s unclear if the project any closer to launching. In addition to difficulty with regulators across the globe, a number of the project’s backers have left the Libra Association, citing a number of concerns.
However, the presence of Libra on the scene has had powerful effects on the cryptocurrency and fintech industries. Many believe that while Libra may be subdued, the project is still alive and kicking–still, the journey to launching may look different than what the organization had originally planned, starting with its timeline.
Libra likely won’t launch this year
Although Libra is still ostensibly planned to launch sometime during 2020, Mark Zuckerberg refused to commit to a 2020 launch in a September interview with Nikkei: “obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But right now I’m really focused on making sure that we do this well.”
And it seems that many crypto and fintech industry insiders do not believe that a 2020 launch is in the cards. According to the 106 respondents to The Block‘s 2020 Outlook Survey–which include representatives from venture capital investing, financial services, and the digital assets industry as a whole — Libra won’t launch by the end of the year.
Indeed, 72 (67.9 percent) of them said “no” when asked whether Libra will launch in 2020, while only 34 or (31.1 percent) of the participants said “yes.”
Facebook itself even conceded at the end of July last year that the project may never launch–in a quarterly report to the United States Securities and Exchange Commission, the company wrote that “our participation in the Libra Association will subject us to significant regulatory scrutiny and other risks that could adversely affect our business, reputation, or financial results.”
Not only is Libra “based on relatively new and unproven technology,” the report said, but the laws and regulations around digital currency are also “uncertain and evolving”: as a result, “Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue,” the report said.
“Libra will never launch in its current form.”
A number of analysts hold the opinion that Libra will, indeed, eventually launch–but that the project will look different than what was originally planned. “Libra will never launch in its current form,” said Anurag Lal, chief executive of internal enterprise messaging service NetSfere, in an email to Finance Magnates.
In addition to the regulatory scrutiny and the exodus of some of the project’s backers, Lal pointed out that “Facebook has always lacked accountability and this level of mistrust [among users] has followed suit when it comes to Libra.”
Anurag Lal, chief executive of internal enterprise messaging service NetSfere.
Therefore, Mr. Lal believes that if Libra will “likely instead launch as a payment platform that’s linked to commerce on WhatsApp, Facebook and Instagram — similar to Venmo and PayPal.” And indeed, Facebook did officially launch “Facebook Pay” late last year, a payment platform that Digital Trends described as “Libra Lite.”
Gary McFarlane, cryptocurrency analyst at online investment platform Interactive Investor, also said to Finance Magnates that if Libra does indeed launch, it will be “in a form that differs from the original whitepaper design.”
Mr. McFarlane said that the benefits that the project would bring to the company are simply too big to forsake: “Facebook needs to open up more growth vectors, and the digital revolution in money and finance is too big an opportunity to pass up,” he explained.
On the other hand, however, Cristina Dolan, chief executive and founder of blockchain solutions firm InsideCHAINS, pointed out to Finance Magnates that Libra’s test net is alive and well: “while some believe that the regulatory hurdles and the large loss of founding partners will prevent Libra from launching in its originally proposed form, it is clear that the Libra test network has been active with numerous projects that have announced support.”
News by Coindesk