Facebook’s Libra taking a beating – here’s why the crypto may never launch

Backers leaving in droves but Libra undeterred

Not a day has gone by recently without another story regarding more regulatory pressure mounting on the world’s largest social media company. Concerns are mounting that Facebook may disrupt the global financial system with its own cryptocurrency, Libra. Its past track record with privacy also leaves much to be desired.

This week it has been the turn of central banks to dissect the cryptocurrency project and Facebook’s grand plans to usurp them.

European Central Bank (ECB) board member Benoit Coeure warned that Libra could challenge the status of the US dollar as the world’s reserve currency.

The French finance minister, Bruno Le Maire, added to the sentiment calling it an assault on sovereignty and a risk to financial stability.

France has already stated that it will not allow Libra on its shores, a notion echoed by German policymakers.

The two European powerhouses are not alone. Facebook’s largest market, India, has also expressed concern over Libra and hinted towards a ban before it is even launched and the platform has been blocked in entirety in China.

The reaction comes as no surprise, considering Facebook’s massive 2.4 billion user base.

If launched it would make Libra the largest currency on the planet – all controlled by a billionaire and a consortium of US tech monopolies based in Switzerland.

It is enough to give any nation nightmares.

Debunking the bankers

Facebook’s efforts this week to debunk the bankers and politicians and justify its own lofty ambitions have fallen largely on deaf ears according to Bloomberg.

Project lead David Marcus tweeted that Libra will work on top of existing currencies to provide a ‘better payments network’.

He added that the crypto asset will be fully backed by a basket of strong currencies.

However, the issue lies in the fact that these baskets will be controlled by private tech firms with limited accountability.

Facebook’s recent handling of sensitive data, peddling of fake news, repeated security breaches, and major privacy violations should be enough to convince anyone that it is simply not suitable to handle global finances.

Add to that the number of scams that have already emerged on the platform regarding the peddling of fake Libra tokens before they even exist.

The evidence against it is mounting and it appears that global regulators and bankers agree.

Bankers bite back

The likely outcome from this episode is that central banks start issuing their own stablecoins based on their respective currencies.

China has already accelerated its efforts to launch a digital Yuan and others are following.

Facebook is clearly being seen as a threat, even bigger than Bitcoin in some respects.

Libra and Bitcoin are poles apart, the only thing they share is a blockchain backbone.

The social media giant has virtually admitted it will be tracking and gathering data from people’s spending habits and using it for profit as it does with personal data harvesting.

The more the company tries to play the benevolent hero of global finance, the more it looks like a wolf in the eyes of regulators.

Facebook does nothing unless it turns a profit and Libra could make it the most powerful corporation on the planet. That is why it is very unlikely to get off the ground.

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