ASSESSMENTS

For Facebook’s Cryptocurrency, the Well May Already Be Poisoned

Aug 15, 2019 | 09:30 GMT

A visual representation of Facebook's cryptocurrency, Libra.

On June 18, Facebook announced the details of its cryptocurrency called Libra, which is set to launch in 2020. The universal currency aims to allow users to buy products or services from Facebook-owned platforms including Messenger, Instagram and WhatsApp -- rivaling established payment systems such as Google Pay, Apple Pay and PayPal.

(Chesnot/Getty Images)

Highlights

Facebook's new Libra coin is asset-backed and runs on a restricted network, which could make it as stable as a major currency — setting it apart from other, much more volatile cryptocurrencies like Bitcoin.
The social media giant's negative political reputation, however, will influence Libra's reception in key markets such as the United States, Germany and India.
This will likely create a hostile regulatory environment toward Libra, which will not only affect its rollout in 2020 but could have detrimental repercussions for the cryptocurrency field at large.

In June, Facebook made waves when it confirmed it was planning to launch its own cryptocurrency in 2020. Called Libra, the system will be connected to Facebook's massive user base, granting it the immediate potential of rivaling such established systems as Google Pay and PayPal. Indeed, Libra hopes to become the world's most widely adopted digital currency -- sparking the kind of economic revolution that cryptocurrency has long promised, but has so far largely failed to deliver. Unlike other digital coins, however, Libra's main barrier to success won't be its technology, but its image. The privacy concerns associated with Facebook, along with the general skepticism associated with notoriously volatile cryptocurrencies like Bitcoin, are hardly relevant to Libra's platform and functionality. But that won't erase regulators' prejudices....

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