Is Facebook Libra now dead in the water?

Social media giant’s attempt to build its own cryptocurrency comes under surely fatal twin blows of partner desertion and G7 suspicion

Posted 14 October 2019 by

Facebook’s Libra cryptocurrency project is on life support after most of its high profile original backers have all walked away.

Specifically, eBay, Visa, Mastercard, Mercado Pago and Stripe left at the end of last week, a few days after another payments leader, PayPal, also announced its withdrawal from the initiative.

Choppy waters ahead for The Zuck?

That means of the 28 original signees of the Libra Association declaration back in June, PayU is now the only payments company left on board.

To make matters even worse – if that were possible – the BBC is today also reporting that the G7 group of leading economic powers is about to come down very heavily against so-say “global stablecoins” like Libra.

That’s because such proposed new forms of currency, whose value will be pegged to real-world assets such as national currencies and government securities, is being held as potentially destabilising – and that, even if Libra’s backers address concerns, the project may not get approval from regulators.

And indeed, it’s the threat of regulatory problems that are being cited by the commercial companies who have said they have either ceased working on Libra work at all, or are now adopting a wait and see attitude to the initiative.

Libra isn’t totally dead yet – major brands like Uber and Lyft are still on the board, which will hold its first board meeting in Geneva today.

But all this puts even more pressure on Facebook head Mark Zuckerberg’s upcoming appearance before US lawmakers later this month, where concerns about what Libra could do to both the US and international finance system will surely become centre-stage.

The problem with Libra coming un-stuck is that, even if you’re not a fan of Facebook or its business model, the idea of a global, distributed Blockchain-backed currency has definite implications for Digital Identity projects in a world where 31% – or 1.7 billion people – are still unbanked.