Facebook’s cryptocurrency project Libra is still very much up in the air, according to board member Patrick Ellis.
Ellis Admits Facebook Has No Clue What It’s Doing
Coming about in late June of 2019, Libra has sparked controversy at every turn, and has people split right down the middle regarding how trustworthy it is and how useful it will be. The idea is that Libra will be used as a cryptocurrency through Facebook for third-world nations to purchase goods and services. Many of these regions don’t have the banking infrastructures necessary to ensure their citizens are well-off financially.
However, Libra has taken a lot of flack given that it stems from Facebook, which has been laden with scandals for the past several years. The biggest one that comes to mind is Cambridge Analytica, which arose in 2018. The company had been selling users’ private information to third parties for several years without their consent or knowledge, and Mark Zuckerberg was stuck explaining himself on live television before a Senate committee.
With the introduction of Libra, many politicians wondered if the past would repeat itself. How would Libra protect users’ private data, many of them wondered. How would it prevent money laundering and other white-collar crime, and how will it enhance America’s financial infrastructure?
These and many other questions remain largely unanswered at press time, and Mark Zuckerberg – the head honcho of Facebook – has even commented that his company will be forced to exit the Libra Association granted the project does not receive full regulatory approval.
The project was originally slated for a 2020 release, but according to Ellis, this might not happen. In an interview with Reuters, he stated:
At this stage, there is no strategy set in stone for the markets or the product, or how it will actually get rolled out.
This is huge, when one really considers the circumstances. A project of global capacity backed by companies as large as Facebook and PayPal (at least at one point) admits to having no idea what it’s doing. Is it safe to say that this project was not well planned? Could executives literally be this unprepared and if so, what are they doing to fix the situation?
It seems like the company is still facing fierce regulatory opposition, which might explain why it’s having such a hard time coming to fruition. Recently, U.S. Federal Reserve governor Lael Brainard commented that Libra will have to face several “legal challenges” before it can be considered a valid stable currency.
Too Many Regulatory Issues?
Without requisite safeguards, stable coin networks at global scale may put consumers at risk. Cryptocurrencies already pose a number of risks to the financial system, and these could be magnified by a widely accepted stable coin for general use.