Will Facebook’s Libra cryptocurrency really be the future of payments in the app, and a game-changer for eCommerce more broadly?
While Facebook has outlined the vast potential of its coming payment option, reception from government and regulatory bodies has been fairly cool, with many countries even signaling total bans of the currency before it even makes it to the next stage.
This week, the French Government has added to this, with French economy and finance minister Bruno Le Maire telling an OECD conference that they will not authorize the development of Libra on European soil, as it poses a threat to “monetary sovereignty”.
Add that to concerns and restrictions in India, where Libra was initially seen to provide the most significant potential – to Facebook’s biggest user market – and the signs don’t look great for Libra’s take-up. Note also that Libra chief David Marcus faced US Congress back in July to discuss American regulatory queries.
While the concept of Libra makes sense, the actual working process of the currency is still far from fleshed out, and Facebook’s more recent track record on data privacy and ad manipulation will certainly not be working in its favor as it seeks the required approvals. You can imagine, too, that many governments would be concerned at the rising power that The Social Network wields. With 2.7 billion monthly active users across its ‘family of apps’, Facebook already hold more influence than any other individual company. Should it also be overseeing financial transactions?
Indeed, many are already calling for Facebook to be broken up, which makes it a less than ideal time for the company to be making a push into expanded payments. That said, Facebook is already rolling out WhatsApp payments in more regions, which is similar in principle, though the creation of its own. dedicated currency is more involving, and may also seem more symbolic of Facebook’s rising power.
It seems now that Libra may not ever even see the light of day, which would be a significant blow for the company.
For its part, Facebook says that it anticipated pushback like this, which is why it gave itself such a long lead time before the full release of Libra.
As per Dante Disparte, Libra’s head of policy and communications (via The Independent):
“In the nearly three months since the intent to launch the Libra project was announced, we have become the world’s most scrutinized fintech effort.”
Sounds a bit like a statement from the Trump administration – but Disparte adds that blockchain is an emerging technology, and they realize they have a way to go in educating decision-makers on the offering.
But it also seems as though much of that education may be irrelevant, with opposition to Facebook in general rising. Even if it clears all the required hurdles, there’s still likely to be significant reservations about a Facebook currency.
There’s still a long way to go, as Disparte notes, but the future of Libra is looking a little muddy at this stage of the process.