Facebook’s Libra may not see light of day; Mark Zuckerberg firm cites no cryptocurrency experience

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Published: July 30, 2019 3:34:21 PM

Even though it is slated for launch in 2020, Facebook said in its quarterly report that the Mark Zuckerberg-led company acknowledges that the push back received by its cryptocurrency has significance.

Libra would be independent of Facebook, which will be a member in an administrative association that already has 27 companies on board. (Reuters photo)Facebook said that it cannot guarantee that its ambitious cryptocurrency Libra “will be made available in a timely manner, or at all. (Reuters photo)

After drawing ire from the likes of Warren Buffett, Facebook’s latest ambition in its cryptocurrency Libra may have hit a roadblock as the social media company itself warned investors that many factors could hinder the rollout of the digital currency. In the latest quarterly report, Facebook said that it cannot guarantee that its ambitious cryptocurrency Libra “will be made available in a timely manner, or at all.” The popular social media platform also said that its participation in Libra is subject to significant regulatory scrutiny and other risks. The same could adversely affect the business, reputation, or financial results,” Facebook said in the report. The company has also factored in its own inexperience in the relatively new field and unproven technology.

Even though it is slated for launch in 2020, Facebook said in its quarterly report that the Mark Zuckerberg-led company acknowledges that the push back received by its cryptocurrency has significance. The company has received a lot of criticism from lawmakers and regulators since the project announcement in June 2019 and the company believes that the same will continue.

“Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue,” the social media company said in a filing with the Securities and Exchange Commission. In a list that spans from US President Donald Trump to Joseph Stiglitz, the critics of cryptocurrency are many.

What is Libra?

Facebook’s own digital currency Libra aims to create a low-cost global payment system available through smart devices. The currency is backed by over 25 partners which include names such as Visa, Mastercard, Uber and Spotify. Facebook has recently announced a digital wallet Calibra as well where users can save, send and spend Libra.

However, the critics of Libra are gaining momentum. Explaining the perils of the cryptocurrency, Joseph Stiglitz, an award-winning economist based in the US said that the world has already seen the havoc created by real estate in money laundering. “We know from the Paradise papers and Panama papers the extent of money laundering. The large percentage of global wealth that is in these dark havens,” he told news agency CNBC just days after Libra was announced.

Meanwhile, in India, a government panel recommended a ban on cryptocurrency earlier in the previous week. However, the same panel suggested that official digital currencies must be kept out of the purview. The committee even recommended a penalty for those dealing in the virtual currencies. The government and regulators will examine the committee’s report before taking a final call on the same, news agency Reuters reported citing the government. The apex bank Reserve Bank of India had also issued a ban on cryptocurrencies last year.

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