Facebook’s drive to create its own worldwide cryptocurrency might have hit a brick wall. The company said that Libra’s planned 2020 launch might be delayed – or it might not ever happen at all.
In a quarterly update filed with the Securities and Exchange Commission (SEC) last week, Facebook warned investors that “market acceptance of such currency is subject to significant uncertainty.”
“As such, there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all,” the company wrote in the section of the report discussing risk factors. “We do not have significant prior experience with digital currency or blockchain technology, which may adversely affect our ability to successfully develop and market these products and services.”
Facebook sees Libra as a currency of the future that’s designed to allow payments to happen across the internet and around the world. It’s specifically aimed at the 1.7 billion people globally who don’t have a bank account. We reached out to Facebook to see if that vision has changed. Company spokesman Joshua Gunter would not say whether or not Libra’s launch would be delayed past 2020, but said Facebook would “not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”
“We know that the journey to launching Libra will be a long one and that we cannot do this alone. Engaging with regulators, policymakers, and experts is critical to Libra’s success. This was the whole reason that Facebook, along with other members of the Libra Association, shared our plans early,” Gunter told Digital Trends in a statement.
“The time between now and launch is designed to be an open, collaborative process,” he added.
Libra has major backing, including support from Visa, Mastercard, and PayPal, but almost immediately drew skepticism from regulators and elected officials in the U.S. and around the world. During a Senate Banking Committee hearing on Libra on July 16, politicians of both parties told Calibra head David Marcus to slow down the plans for a 2020 launch. Sen. Sherrod Brown (D-Ohio) called Facebook “delusional” for wanting to create a currency, and Sen. Martha McSally (R-Arizona) told Marcus that she didn’t trust Facebook. Even President Donald Trump went after Libra, claiming it will have “little standing or dependability.”
At the same time, in India – where Libra sees a lucrative market of more than a billion people – the government has proposed banning Libra.
Facebook seems to be aware that governments around the world aren’t fans of the Libra plans – and said as much in the SEC filing.
“Libra is based on relatively new and unproven technology, and the laws and regulations surrounding digital currency are uncertain and evolving,” Facebook wrote. “Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue.”
“As a primary sponsor of the initiative, we are participating in responses to inquiries from governments and regulators, and adverse government or regulatory actions or negative publicity resulting from such participation may adversely affect our reputation and harm our business,” the company added.
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