It looks like financial partners of Facebook are having second thoughts on their support of Libra. Mastercard, Visa, and other Facebook’s financial partners that promised to invest in Libra cryptocurrency are reconsidering this decision. Facebook, the developers of the network, may not receive key financial help.
The Step Back
Financial partners of Facebook are willing to start regulatory scrutiny after Facebook received declines from banks and governments. When the popular social media network developer asked to publicly support their idea, officials refused to do that. Now key investors are getting cold feet as well.
Libra crypto is controlled by Libra Association, the authority that was co-founded by Facebook. It was planned to be released in 2020. It had to be backed by a basket of currencies and the US Treasury securities to survive and escape the volatility. According to Facebook officials, Libra partners had to invest $10 million each to back up the new cryptocurrency.
It was officially announced in June 2019, and in July 2019 Facebook announced that the cryptocurrency will not be released until it receives approvals from the government. Mark Zuckerberg, the head of Facebook, revealed that they still lack the approval of the USA regulators, and will not move forward without it.
The Noble Goal
According to Libra Association, the main purpose of Libra cryptocurrency is to help millions of people. Their intention is to bring Libra to the people who don’t have bank accounts and are in need of digital currency for online transactions. The idea was supported by 27 partners. Among them are Lyft, Uber, PayPal, Visa, Coinbase, Vodafone, Mastercard, Spotify, and eBay. By 2020, Facebook plans to increase the number of partners up to 100 members.
Privacy Issues of Facebook
After regulators declined to support new digital money, they revealed their concern about Facebook’s history of privacy violation. Besides, they were not sure about possible volatility. The head of the US House Financial Services Committee, Rep. Maxine Waters, said that Facebook disrespected their users' security, and regulators are concerned about its new project.