“Doomed to failure!” Is Facebook’s Libra adventure already over?

Ever since last year’s data privacy scandal, Facebook has looked like a company running out of friends.

Indeed, just four months on from the announcement of its proposed new cryptocurrency — Libra — major names including Visa, Mastercard, eBay, Stripe, Paypal and Mercado Pago have already exited the Facebook-led project.

It’s probably no surprise, therefore, that political and business leaders across the globe have also been queuing up to put the boot into Libra.

Disruptive, or just ‘delusional’?

According to the South China Morning Post Huang Qifan, the former mayor of Chongqing in southwest China, told Shanghai’s Bund Summit that it was “delusional” for Libra to try and challenge sovereign currencies.

“If commercial companies can issue various currencies, this world will be in chaos. That is equivalent to returning to the primitive society. This is ridiculous, so I personally believe that Facebook’s Libra would never be a success.” He said.

Where China is concerned though, Libra is always going to be playing on a particularly sticky wicket.

There are those that believe China’s decision to develop their own cryptocurrency was accelerated by the news of Libra’s progress. The New York Times states, for example that “for Beijing, Libra has provided another urgent motive for digitizing the currency. China blocks Facebook’s platforms within its borders, but Chinese leaders see in Libra the potential start of a new world financial system, one that could bulldoze the traditional authority of governments and central banks — China’s included”.

The recent high-profile attacks on Libra, combined with China’s advancement of its own cryptocurrency could well be an example of what Mu Changchun, a top official at China’s central bank, hinted at in a recent online lecture when he said: “We need to plan ahead to protect our monetary sovereignty.”

No-go in the Eurozone?

Resistance to the potential launch of Libra, or ‘Zuck-Bucks’ as some have dubbed the planned cryptocurrency (after Facebook creator Mark Zuckerberg) has certainly not been restricted to the Far East though.

Politico has reported that: “The eurozone’s five largest economies are teaming up to make it as difficult as possible for the Facebook-led virtual currency to launch next year.

France is spearheading the effort with Germany, Italy, Spain and the Netherlands, following a series of backroom meetings in October to secure a unified front against the Libra currency”.

“Hell no”

Facebook even appears to be short of allies within the social media community. Twitter supremo Jack Dorsey said “hell no” when asked if he would join Libra, according to The Verge

“It’s not an internet open standard that was born on the internet,” Dorsey said. “It was born out of a company’s intention, and it’s not consistent with what I personally believe and what I want our company to stand for.”

Domestically, Zuckerberg doesn’t seem to be receiving much support for his cryptocurrency plans either.

After a 6 hour grilling by members of the US House Financial Services Committee last month, word spread that lawmakers were left ‘unimpressed’ by Zuckerberg’s testimony.

Rep. Sylvia Garcia, D-Texas commented after the session — “I don’t think it’s going to be that independent if Facebook has such control and it’s their platform,”. A common fear that Zuckerberg and Co will have to allay if Libra is ever to come to fruition, it seems.

Zucker-punch for Libra critics

Team Libra has come out fighting though. David Marcus, head of Calibra — the new digital wallet for Libra told attendees at Money 20/20, Las Vegas, that “the most meaningful innovations that have changed the lives of millions across the world in a profound way have always been met with damning headlines.”

As reported by FinExtra, Marcus believes things may get worse before they get better, but Libra is on the right track “These headlines are a preamble to more hard times ahead and we must govern the network into a place where it will meet regulatory standards, then we will see the network come to life. People deserve much better than they have”. He said.

If there is little doubt in the validity of Marcus’ rallying cry that people deserve better, there’s certainly a growing risk that Libra will be beaten to the punch in delivering the solution.

David Rutter, Chief executive of Blockchain tech company R3 has revealed that Facebook’s attempt to spearhead a new cryptocurrency has “clearly accelerated some timeframes” for banks and other institutions looking to follow suit.

Time will tell, but with a stream of competitors both state-backed and corporate looking to pick the bones of Libra’s potential failure to launch, the clock is certainly ticking…

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