Facebook’s Libra Faces Backlash and Challenges
When Facebook announced the launch of its cryptocurrency, Libra, it received an unexpected amount of attention. This was surprising, considering that there were already more than 2,400 cryptocurrencies in circulation, most of which were virtually worthless and unheard of. However, Libra’s promises to revolutionize the global financial system and target the world’s unbanked population quickly captured the public’s interest. The fact that Facebook was the main backer of the project added to the hype, despite the company being embroiled in data privacy scandals.
Cryptocurrency fans were quick to criticize Libra, claiming that it did not adhere to the fundamental principles promoted by the community. They argued that Libra transactions still relied on trust rather than mathematical proof, which went against the core principles of cryptocurrencies. Economists voiced concerns that Libra could challenge countries’ control over their monetary policy, potentially undermining democracy.
Lawmakers and regulators from around the world also expressed apprehension about the new cryptocurrency, with many announcing plans to launch investigations or take action against it before its official launch.
In early October, the project suffered a setback when PayPal, one of the 28 founding members of the Libra Association, withdrew from the project. This was followed by the withdrawal of other key partners, including eBay, Visa, Mastercard, Stripe, and Mercado Pago, leaving only one payments partner, fintech company PayU.
The challenges continued to mount for Libra, as Facebook CEO Mark Zuckerberg faced a formidable grilling from the US Congress. In an intense hearing in front of the House Financial Services Committee, committee chair Maxine Waters called for a moratorium on Facebook’s development of Libra, urging the company to focus on addressing its existing problems before proceeding with the cryptocurrency project.
Despite the initial excitement and hype surrounding Libra, it had faced significant opposition and challenges from various quarters. The project’s future remained uncertain as it navigated through regulatory hurdles and the withdrawal of key partners. Whether Libra would be able to overcome these obstacles and fulfill its ambitious promises remained to be seen.
