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Facebook has unveiled plans for a cryptocurrency called Libra less than a month ago, but is already running into the obstacles of regulators and lawmakers in Washington D.C.
As a result, some technical officials expressed doubts about the launch of the project by 2020.
"I think in two years we'll say," Do you remember that Facebook story? The balance? "Said Bismarck Lepe, CEO of Wizeline, a San Francisco product development company.
On June 18, Facebook announced Libra and its digital wallet Calibra. Regulators reacted quickly.
Democrats of the House Financial Services Committee almost immediately called Facebook to end the cryptocurrency implementation.
On Wednesday, US Federal Reserve Chairman Jerome Powell told the House's Financial Services Committee that Libya had reported "serious concerns about privacy, money laundering , consumer protection and financial stability ".
Facebook also told Bloomberg on Tuesday that Calibra would not launch in India, where the country's central bank banned financial companies last year from dealing with cryptocurrencies.
With so many legal hurdles at this point, many technology industry players have told CNBC that they are not expecting Facebook to launch Libra and Calibra's. 39, here the first half of 2020, as planned.
"While there is potential for innovation in Libya, we should expect more control from the federal government, but also from the state level, not to mention regulators in many markets outside the United States. United, "said Anuj Nayar, head of financial health at LendingClub. .
To successfully launch Libra and Calibra, Facebook will have to overcome many financial regulations in the fight against money laundering, money transfers, data security and data privacy, said Charley Moore, CEO of Rocket Lawyer, a San Francisco company providing online legal services. Nayar added that Facebook will also have to become familiar with all these regulations as they differ from one region to another.
"In the United States alone, this may vary by city, state and federal level," he said. "Given the extent of Facebook's reach and the ambitions of the new Facebook piece, it's hard to predict which area will be the hardest for them."
In addition to the stringent regulations that accompany financial services, Facebook could face criticism based on the company's track record of trust and privacy, said Dimitri Sirota, CEO of BigID, a privacy firm in New York. .
"Facebook will not go far with Libra if consumers are worried that their financial data will be compromised or misused, and regulators do not trust Facebook to protect this data safely," Sirota said.
Even companies that want Facebook to succeed with Libra have reservations about whether this will happen.
Abra, a startup-based digital portfolio located in Mountain View, Calif., Plans to support Libra as soon as it's available, said CEO Bill Barhydt. But Facebook runs a lot of risk of overtaking regulators, he added.
"That's why they had to announce this announcement earlier than expected – I think they knew that there would be a political storm that would be unleashed," said Barhydt.
Moore of Rocket Lawyer said that regulators should not try to stop innovative technology like Libra, but "legitimate political issues, such as the impact on long-term monetary policy, should be examined by the Congress and other agencies ".
At least one of the first Facebook investors, Matt Ocko, is actively encouraging regulators to stop Libra before it's launched.
"Many countries are legitimately afraid that Facebook's immoral and immoral vampire squid will be stuck in control of their currency and banking systems by their country," he said. "I hope enlightened regulators will kill this thing in its own way."
Meanwhile, society is preparing for questions. David Marcus, the Facebook executive at the helm of the project, is scheduled to testify before the Senate Banking and Banking Committee and will be actively engaging regulators and others to provide feedback.
"We want and need from governments, central banks, regulators, non-profit organizations and other stakeholders and we appreciate all the feedback we have received," Marcus wrote in a statement. letter addressed to the committee on Monday.
When asked to comment on the technology industry's skepticism towards Libra, Facebook pointed to Marcus's letter.
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