According to reports from “The Financial Times”, at least three out of the initial 27 companies that are backing Facebook’s new cryptocurrency project Libra, are considering backing out of it. This is due to the growing regulatory pressure, making the act of supporting libra a public liability according to one of the members.
What are the Factors?
Maybe the best-known reason for backers to be reconsidering their decision to support Libra is the fact that the cryptocurrency is created by a social media giant and it will be a centralized asset. Not only that but also the very harsh regulatory issues that the project is facing could put it on hold. The three companies that are reconsidering supporting Libra also might be worried about the social impact of supporting libra may have, even though they are in compliance with their own regulators.
There is also information that the EU is investigating the Libra Association over potential antitrust issues, while the United States lawmakers are calling for Libra to be held until everything regarding regulation has been resolved. As an answer to this statement, the blockchain lead of the social media titan, David Marcus, assured all U.S. senators and lawmakers that Libra will not be launched until these concerns are properly addressed. Meanwhile, a group of U.S. lawmakers that will be led by Democratic Congresswoman Maxine Waters, will be visiting Switzerland and go to the association’s HQ in order to discuss the Libra project.
Facebook’s Crypto Experiment
The world of blockchain technology is rapidly expanding with new tech and solutions being made on a regular basis. This, of course, did not escape the gaze of the top social media company – Facebook. Ever since they announced their Libra project back in mid-June, they have faced continuous distrust and intense regulatory scrutiny.
In the light of the events mentioned earlier, sources mention that these frustrations are actually going both ways. To simply put it, Facebook seems disappointed with the Libra Association due to the lack of support for the project on the side of the association. One of the members states “Facebook is tired of being the only people putting their neck out”. While this is somewhat true and the social media goliath can afford to be the “trendsetter” and innovate while taking the hits from critics, we think that their dive into the world of crypto assets and blockchain will be a tough one.