The relentless pushback that Facebook’s Libra cryptocurrency is facing is raising the question of whether forging ahead is worth it. | Source: AFP PHOTO / Brendan SmialowskiBy CCN Markets: Weeks after various jurisdictions around the world expressed concerns over Facebook’s Libra project, it is now the turn of EU authorities to push back against the social media giant’s plans.
According to Reuters, EU antitrust regulators could be looking to formally investigate Facebook’s Libra cryptocurrency in the near future. The regulators have reportedly sought feedback from Facebook’s partners in the cryptocurrency project.
Though the report did not indicate which of Facebook’s partners have received the questionnaires, the founding members of the Libra Association include Stripe, PayPal, Visa, and Mastercard.
Libra’s founding members | Source: Libra.org
With all the pushback that Facebook has been receiving, including from the U.S. Congress, it is not too farfetched to question whether Facebook might be better off throwing in the towel and staying out of financial services.
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Winners know when to quit
Among those who are of this school of thought includes Bloomberg’s Alex Webb. Writing in an opinion piece, Webb questioned whether a cryptocurrency was the right diversification move for the social media giant:
“One has to wonder whether the growing regulatory scrutiny the currency is attracting will make the project worth the effort for Facebook. For sure, the social networking giant needs to find a way to diversify its revenue away from advertising. But I’m unconvinced that Libra does that.”
A contrary opinion is held by Marc Boiron, a securities and blockchain lawyer and a partner at FisherBroyles. Per Boiron, Facebook has no choice but to pursue the cryptocurrency project as this will make its platforms even more ‘sticky.’
“[Libra] would have the ability to cause people to spend significantly more time within its applications, which will naturally lead to more revenue and the ability to start broadening its product offerings in more and more financial-related products.”
Libra, a good idea that has been stained by the Facebook brand?
Boiron, however, warns that Facebook has to play the long game as its reputation “cannot be repaired in the short term.”
Facebook should stop trying to disrupt payments with Libra and focus on repair – https://t.co/0lOWkihF4m pic.twitter.com/uXke7n3x4r
— usa news (@USA_DAILY_NEWS) August 18, 2019
And for Libra to get the green light from regulators across the world, other founding members of the cryptocurrency project might have to get more involved in the project, urges the securities and blockchain lawyer:
“For Libra to work in the short-term, it will require other reputable companies, some of which have been announced, to actually join Libra and stand next to Facebook in discussions with regulators and politicians.”
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