Here’s yet another reason why Facebook’s Libra might never happen

Some of the early backers of Facebook’s Libra are looking to distance themselves from the cryptocurrency project.

According to The Financial Times, at least three of the project’s founding backers are concerned about the regulatory spotlight on the project and are considering discontinuing their support over concerns that their involvement will draw the attention of agencies that regulate their businesses.

Facebook released a white paper in June explaining its plans for Libra. It describes the cryptocurrency as a way for payments to be processed seamlessly across all 1.7 billion people in the world, a universal currency of sorts.

There are currently 28 founding members of the Libra Association including Visa, Mastercard, Uber, and Spotify.

The currency is already getting a good deal of scrutiny from politicians, and European Union antitrust officials have opened an official investigation into the project. In early July, President Donald Trump attacked Libra via Twitter.

“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” Trump tweeted. “Unregulated Crypto Assets can facilitate  unlawful behavior, including drug trade and other illegal activity.”

Trump wrote “Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, but like other Banks, National and International.”

Democrats in the House of Representatives have also called on Facebook to stop its plans to establish the currency. Data protection officials from the E.U., U.K., Canada, and Australia also released a letter this month detailing privacy concerns they have over the proposed currency.

In July, Facebook’s Libra head David Marcus published a blog post where he said Libra was “committed to a collaborative process with regulators, central banks, and lawmakers to ensure that Libra helps with the kinds of issues that the existing financial system has been fighting, notably around money laundering, terrorism financing, and more.”

Facebook has said that it plans to launch Libra in 2020. A Facebook spokesperson declined to comment when Digital Trends asked if this would delay the launch. 

Updated 8/23 with Facebook spokesperson’s response. 

Editors' Recommendations