Facebook Libra remains positive with boost from Taiwan

This past Monday saw 21 companies, down from the original 28 after several walked away, sign the charter to be founder members of Facebook’s Libra stablecoin project. It was a means for the social media giant to assert that it has no plans of backing down, despite overwhelming opposition to Libra, and support out of Taiwan has given Facebook more optimism and energy to keep pushing forward. Whether or not that push is successful won’t be ascertained until sometime next year.

The Libra Association will reportedly guide the way for the social media’s financial solution but, quizzically, not a single financial institution has signed up to be involved. That’s no big deal, asserts Facebook, as it asserts that it is “confident” another 100 members will join the group. In an interview with CNBC, Libra Association Chief Operating Officer and Interim Managing Director Bertrand Perez said some of those who are interested include “banking and financial institutions,” although no names have been provided.

Perez added that the entities will be disclosed over the next couple of months and that a delay in Libra’s launch is almost a guarantee as the company works to show that it can comply with financial transaction regulations in different countries. He rationalized the delay, stating, “With such a big project and the vision that we’re having, launching a few quarters later or before makes no real change.”

What might make a change is support coming from the richest man in Taiwan. Terry Gou, the founder of the Foxconn manufacturing behemoth, believes in Facebook and in the Libra project. He wants Taiwan to fully embrace the stablecoin and even suggests that it could ultimately be tied to China’s own state-backed digital currency if the two are ever launched.

Earlier this month, Gou appeared at a meeting of Taiwan’s tech leaders where he openly showed his support for Libra. He said at the time, “I know [Facebook CEO Mark] Zuckerberg pretty well, and I hope we can bring Libra to Taiwan in the future. Mainland China has decided not to accept Libra and build its own digital currency. That creates a great opportunity for Taiwan as we can become a place where the two separate systems converge.”

The man who wanted to become Taiwan’s next president in 2020 before dropping out of the race in September has a lot of influence across the globe, thanks to a net worth of $6.7 billion. He has already helped bridge the gap between the country’s tech space and crypto by facilitating several projects, but he still may not have enough pull to change the minds of several world leaders, including those of the U.S., Germany, and France, who are firmly opposed to Libra.

Facebook Libra forges ahead as council named and problems continue

Facebook is still chipping away at the rough stone that it hopes will eventually become a highly polished stablecoin project. Despite overwhelming concerns over the ability of the social media company to responsibly manage a financial solution, Facebook still has high hopes for Libra and is attempting to act as if nothing is wrong. Like a duck on a pond, though, what’s on the surface isn’t always the same as what’s found underneath.

Libra just lost a number of its original backers, including Visa, MasterCard, PayPal, Stripe, eBay and Mercado Pago, who pulled out of the Libra Association within the past couple of weeks. According to the U.S. Treasury Secretary, Steven Mnuchin, this is because they came to their senses. He told CNBC this week, “I think they realized that they’re not ready, they’re not up to par. And I assume some of the partners got concerned and dropped out until they meet those standards.”

Those standards refer primarily to guidelines established by findings of a working group created by the G7 to explore stablecoins, BBC reported. The group determined that stablecoins, including Libra, are a major risk to the global financial system and supported its findings by providing nine different ways the projects could be detrimental.

Among those ways, the working group’s report said that stablecoins could cause issues for policymakers when they try to establish interest rates, that they could create financial instability if users were to suddenly lose confidence in the currencies and others. The report asserts, “The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed” and adds that rectifying any concerns “is not necessarily a guarantee of regulatory approval for a stablecoin arrangement.”

Still, the Libra Association is forging ahead. While it doesn’t have the original 28 founding members it expected to have, 21 are still said to be involved and they all met Monday in Geneva, Switzerland, to sign the Libra Association charter. Among these companies were Uber, Spotify, Anchorage, Coinbase, Vodafone, Kiva Microfunds, Lyft and Women’s World Banking.

Each member will have one vote in how Libra operates and, according to the charter, will have to recuse itself if there’s a conflict of interest. That might result in a lot of recusals, since several companies have already been said to have intertwined relationships with Facebook. However, the charter also allows members to transfer their membership to other companies “under limited circumstances,” which might make any recusal irrelevant.

None of the founding members appears to be too concerned with all the negative attention the project is being given. Spotify released a statement expressing its optimism, saying, “Though it is still in the early stages, we look forward to exploring the opportunity offered by the Libra Association to empower billions of people globally, especially in financially underserved markets.”

A look back at the latest in the Facebook Libra saga

It’s unlikely that Mark Zuckerberg expected the widely negative response that his Libra stablecoin project has received. The Facebook founder and CEO has had a difficult time convincing anyone that it’s a viable solution to the world’s banking issues, and this sentiment doesn’t appear to be ready to change anytime soon. Zuckerberg will try once again to convince U.S. lawmakers that the project has merit, but the road that has brought him this far is paved with failed intentions. 

When it looked like Libra would receive support from companies such as Visa, MasterCard, Stripe and PayPal, lawmakers stepped in to issue gentle warnings to the companies that it wouldn’t be a very good idea to officially back the project. Two U.S. lawmakers penned a letter to the companies’ CEOs, reminding them of the risks Libra has to consumers and mainstream finance. PayPal had already pulled its support last week and others, including Visa, MasterCard, eBay and Stripe have followed, as well. The losses put the project at further risk of never fully getting off the ground.

One of the biggest reasons that regulators and governments are concerned is because Facebook is so big – hundreds of billions of customers big. It has already shown that it isn’t capable of adequately protecting user data, as several breaches have revealed, but Facebook asserts that this shouldn’t a consideration. Its involvement, according to the company, is minimal and it will only have one vote in the Libra Association, the organization that will manage the project.

However, a closer look reveals something different and shows that regulators are correct in being cautious. Of the Libra Association’s 27 founding members (provided they all stay in place), 15 have ties to Facebook. Andreessen Horowitz, for example, is a founding member and also a Facebook investor, as well as an investor in four other projects tied to the Libra Association. Marc Andreessen sits on the company’s board. Another Facebook investor and board member, Peter Thiel, is also an investor in projects of two other Libra Association members.

Many countries have already announced that they won’t allow Libra to be used within their borders and the European Union (EU) is now pushing for new rules that could be implemented for the EU in its entirety. Japan has joined from the outside, looking to take that EU suggestion to a whole new level and make the rules global. It seems like the only major friend Facebook has lately for Libra is IBM.

Facebook had initially thought that it would be able to have Libra ready to go this past summer, based on the fact that it believed it was too powerful to be stopped. As soon as reality set in, it figured out that more time would be needed and then set a potential launch of June of next year. Based on what has transpired over the past month, and what is still to come, Libra will most likely be delayed even further and, with many of its backers jumping ship, may even never survive.

Editor’s note: This article has been updated.

Facebook Libra launch delayed? You can start betting on it

Facebook’s plan to launch its own cryptocurrency may be delayed beyond 2020. It appears that growing concerns related to regulation may bring a delay to the launch of Libra which was expected to occur in June 2020.

That news has sent shockwaves through the digital currency world, as crypto markets have fallen because of what is deemed as “chaos” regarding the speculation. One virtual currency exchange even saw a “dramatic crash” within minutes after the news that Libra may be delayed was revealed.

Not everyone is saying this is a bad thing, however. Some are not only reveling in the news but are giving you the opportunity to make some money off of the delay. CoinFlex, in particular, is offering prediction futures on whether Libra will actually launch next year or not.

This crypto derivatives exchange is offering futures contracts that will be settled based upon whether Facebook is able to launch its digital coin in 2020. The initial futures opening (IFO) will begin on October 24. The price will be set at $0.30, as it is believed that there is a 30% likelihood that Libra will launch by the end of next year.

For those looking to get in on the deal, the IFO will offer you just 30 minutes to participate to purchase contracts at that price. Traders will be able to bet on both long and short-term trades, with a cap of $1.1 per Libra.

In a statement, CoinFlex CEO Mark Lamb explained, “Facebook has the ability to rival the entire global banking system from day one, but, because of that fact, when that first day will be is far from certain. The political backlash has been brutal, and it’s anyone’s guess if Facebook will get this over the line.”

For those who do not get in on the initial IFO at CoinFlex, don’t feel you are left out of the market. The CEO of the Singapore-based exchange Three Arrows Capital, Su Zhu, explained that his platform will also likely be offering such an opportunity. He recently stated, “This can be interesting if it gathers liquidity as its kind of a prediction market on Libra.”

All the speculation has come from a growing number of countries creating regulations designed to protect investors and remove potential money laundering and scams from the digital currency market. In addition, countries such as France and Germany have pledged to block Libra from operating in Europe. It is these kinds of events that are likely to stand in the way of the launch of the Facebook currency, maybe stopping it from launching at all.

Facebook Libra: PayPal pulls out, Congress demands Zuckerberg testimony

The constant pressure on Facebook Libra has made it difficult for Libra Association members to lend their full throated support to the venture, with many of them considering dropping out entirely. Paypal’s breaking point appears to have been reached, as the payment provider has decided to leave the association as the U.S. congress calls on Mark Zuckerberg to testify and European NGOs petition against the digital crypto.

The bad news began when Facebook Chief Operator Officer Sheryl Sandberg had agreed to testify before the U.S. House of Representatives Financial Services Committee, but congress refused to schedule the hearing until founder Mark Zuckerberg agreed to appear as well, Reuters reported on October 4. That deadlock between the social media giant and Congress is bad enough, as the Libra Association had promised not to release its currency until regulators approved it, and there would be no chance for approval until Zuckerberg agreed to testify.

That was enough for PayPal to call it quits. The Block reported on the same date that a source within PayPal leaked they were done with the whole endeavor, but wished them luck going forward. “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future,” PayPal said in a statement. “Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”

If losing PayPal, a major payment provider, wasn’t enough of a shock, take into account that they also recently faced news that both Visa and MasterCard have also recently considered backing out of the project.

But if that wasn’t enough bad news for Libra, a petition from several European NGOs also made the headlines, reaching 55,000 signatures calling on a ban for the currency. The petition was created out of fear that Facebook and its partners simply can’t be trusted to handle any more sensitive information:

Facebook has already breached our privacy countless times. Now, the big tech giant is preparing to invade one of our last areas of privacy: our money.

With partners already dropping and the pressure continuing to mount, Facebook will have to make a decision soon about what to do with its future digital currency, because it appears to be in serious trouble.

Facebook’s Libra isn’t out to replace existing money, Perez claims

Libra isn’t out to overhaul the existing currencies, the project’s head recently stated. Ever since Facebook announced the intention to launch the crypto, it has faced opposition from several policy makers who believe that it could negatively affect their countries’ monetary structures. However, the project’s head wants us to know that Libra will benefit the users and strengthen their economies, not threaten their currencies.

Bertrand Perez, the managing director of the Libra Association was speaking during a blockchain conference organized by the United Nations in Geneva, the city where the association is based.

“We are not in the area of implementing any monetary policy with the (Libra) Reserve,” he stated.

Instead, Perez believes that Libra will help the UN achieve many of its sustainable development goals. These include elimination of poverty and achieving gender equality, he stated during the event which included speakers from the International Monetary Fund and the Swiss National Bank.

And it’s not just Libra that promises to help the UN achieve its goals, with blockchain technology being at the heart of the discussions in the recently-held United Nations General Assembly (UNGA) in New York.

One of the speakers at the event, Dr. Jane Thomason, a global thought leader in social impact stated, “It is early days, but in the social benevolence and impact space, the application of blockchain for remittances, financial inclusion, green bonds and new forms of financing are receiving increasing prominence in global discussions at 2019 UNGA.”

The relentless opposition to Libra seems to have forced Facebook to reconsider its strategy, with Mark Zuckerberg recently acknowledging that the company may have to push the launch date. In a recent interview, Zuckerberg revealed that the social media company is more interested in getting Libra right rather than launching it fast.

He stated, “Obviously we want to move forward at some point soon [and] not have this take many years to roll out…But right now I’m really focused on making sure that we do this well.”

Zuckerberg was speaking in Japan, the latest country to voice its opposition to Libra. The governor of the Bank of Japan recently called out on regulators globally to apply the highest standards of compliance to Libra as it could have a huge impact on society once introduced.

Facebook Libra may not launch in time after all

Facebook founder and CEO Mark Zuckerberg has suggested Libra may not launch on time after all, in a week that has seen the stablecoin meet more resistance from regulators.

Earlier in the week, the Bank of Japan (BoJ) became the latest central bank to voice its opposition to the project, calling for strict standards of international regulation to control the proposed stablecoin.

Libra had been scheduled for release in 2020, with plans for an international rollout. Now, in an interview with Nikkei Asian Review, Zuckerberg appeared to imply there was flexibility in that timescale. Acknowledging the concerns of regulators and other industry stakeholders, Zuckerberg said Facebook would “work through” these challenges before proceeding with the launch of Libra.

A lot of people have had questions and concerns, and we’re committed to making sure that we work through all of those before moving forward.

Tellingly, he suggested it could take a number of years to get the launch right, in remarks which appear to come in response to the growing disquiet of financial regulators and central banks worldwide, saying, “Obviously we want to move forward at some point soon [and] not have this take many years to roll out…But right now I’m really focused on making sure that we do this well.”

Zuckerberg said that Facebook now intends to have a period of review and consultation before the launch, which could add further delay to the rollout.

“Part of the approach and how we’ve changed is that now when we do things that are going to be very sensitive for society, we want to have a period where we can go out and talk about them and consult with people and get feedback and work through the issues before rolling them out,” he told the news outlet. “And that’s a very different approach than what we might have taken five years ago. But I think it’s the right way for us to do this at the scale that we operate in.”

While Zuckerberg stopped short of putting a revised timeline on the launch, his comments pour cold water on the promise of a 2020 launch.

Even on a longer-frame timescale, Facebook still has a number of challenges to overcome in order to get its stablecoin into circulation. 

Facebook Libra exec hits back at claims of stablecoin threat

Despite overwhelming resistance from all around the world, Facebook is still determined to see its Libra stablecoin become a reality at some point. The U.S., France, Germany and others have already made it known that they are more than just a little apprehensive about the digital currency – and Facebook’s ability to offer it, given its shaky track record on privacy – and other countries have announced a definitive ban on the currency inside their borders. Still, the struggle continues and Facebook’s David Marcus has weighed in on the concerns.

Marcus is the co-creator of Libra and the former president of PayPal. As the stablecoin’s co-creator, he has more than just a little love for the project and is in charge of trying to turn it into a legitimate alternative. On Twitter yesterday, he launched a series of tweets to try to clear the air on Libra, offering several reasons why it will work.

Libra is reportedly going to be “backed 1:1 by a basket of strong currencies. This means that for any unit of Libra to exist, there must be the equivalent value in its reserve.” Marcus adds that governments are more than welcome to oversee the project to ensure it doesn’t stray from its model. The Tether project could learn a lot from the executive.

Marcus feels that Libra would not be a threat to any nation’s sovereignty, but many have not yet been convinced that this is true. In addition to Facebook’s history of either willfully releasing personal information or using its platform to its advantage, there have been numerous security breaches that have led to the loss of data and money. The jury is still out on whether or not Libra would be able to perform any better or cleaner.

Facebook is still intent on convincing the world that it has grown up. Representatives from the company, as well as from JP Morgan and others, met with global central bank officials this week to discuss crypto and, particularly, stablecoins and the role the latter will play in an evolving financial realm.

The Bank for International Settlements (BIS) talks about the meeting in a press release, adding that it was convened by a working group comprised of Group of Seven members to better understand stablecoins and to possibly formulate policies for their acceptance. Its findings are expected to be released sometime in mid-October.

Those findings will most likely not put stablecoins in a very good light. Benoît Cœuré, who is a European Central Bank board member and chair of the BIS-hosted Committee on Payments and Market Infrastructure, states in the release, “As a new technology, stablecoins are largely untested, especially on the scale required to run a global payment system. They give rise to a number of serious risks related to public policy priorities. The bar for regulatory approval will be high.”

Facebook should forget Libra, launch stablecoin on Bitcoin SV

I think Facebook is realizing the obvious — its Libra stablecoin project is never going to properly get off the ground. Several countries have already come forward to say that they will completely ban the digital currency, while others are pushing for a complete and thorough investigation, coupled with regulatory approval, before allowing the project to see the light of days. The social media giant has stated that it is willing to wait as long as it takes regulators to determine the viability of the project, but there is a much simpler, much more accessible alternative: give up the standalone crypto and launch a fully-backed stablecoin on the Bitcoin SV (BSV) blockchain.

Facebook could also go a different route and just let BSV become its currency. With the lowest fees of any crypto and the proven capability of being able to handle a large number of transactions simultaneously, thanks to the Quasar upgrade, Mark Zuckerberg can stop beating his head against the wall and offer a cryptocurrency that meets his Libra goals — a worldwide payment solution that is available to everyone, even those who have no access to banks.

The U.S. government is trying to prevent large tech companies from entering the financial space. A bill has been drafted by the House of Representatives that is aptly called the “Keep Big Tech Out Of Finance Act” bill. It states, in part, “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”

This would preclude the participation in a financial system by companies like Google, Facebook and virtually any large tech entity.

The Tokenized Protocol on BSV is a great way for businesses to tokenize assets and offer those assets to customers. This would be a solution that could be easily integrated and easily implemented by Facebook, saving the company from the hassles it currently faces through global regulatory scrutiny. According to Tokenized founder and CEO James Belding, “That simple truth is that organizations must comply with the laws and regulations of the jurisdiction they reside in. Building the technology around a sensible assessment of these solution requirements allows for a token system that is much more expressive, performant, secure and lower cost than competing solutions.”

BSV understands something that other major crypto projects don’t. Bitcoin wasn’t created to be above the law, nor is it meant to allow users to circumvent the law. On the contrary, it was designed to work within regulated financial frameworks while giving consumers easier access to currency solutions. This is what Libra has professed itself to be and, given that BSV is already a regulation-friendly digital currency, it is fitting that Facebook turn to the real Bitcoin in order to fulfill its goals.