Facebook’s Libra Currency Is Falling Down: Partners Start Ditching it!

Must Read

Windfall! Online Grocery Market In India Looks Set For Purple Patch Ahead

Silver linings are clearly in short supply in the pandemic fuelled world that we have come to...

Apple Store In India: More Of Disappointment Than Excitement?

Apple has started making moves to strengthen its presence in India. With the launch of Apple online...

Facebook’s Chasm Of Distrust: An Ever-Deepening Divide

Facebook, the world's most popular social media platform has failed measurably as it is voted as the...

Amid security concerns raised by authorities, Facebook’s Libra Association has reportedly started crashing down as it has lost a quarter of its members.

The crypto-currency project, first announced officially back in June, originally consisted of 28 founding members, including well known players such as Paypal, Mastercard, Spotify, Uber, Vodafone, etc. This body collectively formed the Libra Association, set in place to supervise the workings of the project and the crypto-currency itself. The assembled team was made up of specialists from different areas like payments, online marketplaces, blockchain, telecommunications, etc.

Founding members abandoning the project

Out of the initial 28 members, only 21 now remain, as 7 core members have taken turns to pull out of the venture over the past 2 weeks.

Advertisements

It all started with Paypal Holdings Inc. that was the first to leave Libra Association on October 4, 2019.

Then, on Friday, 4 founding members left simultaneously. This included EBAY Inc., VISA Inc., Mastercard, and Stripe Inc. All corporations, excluding Stripe, acknowledged the potential benefits of the venture but favored focusing on improving their own companies. Stripe Inc, however, expressed willingness to join the project at a later stage.

Mercado Libre, an Argentinian e-commerce site also reportedly abandoned the project.

The last to leave was the travel agency Booking Holdings Inc. on Monday. However, they are yet to state their reasons.

What is Facebook Libra?

Libra is Facebook’s attempt at rivalling Bitcoin. In other words, it is Facebook’s advance into the crypto-currency market.

Advertisements

In the simplest of terms, cryptocurrency refers to a digital currency. To ensure security, this currency is crypto-graphed, i.e., converted to an undecipherable form. It was designed to carry out secure digital transactions of a digital model of cash.

While deriving its basic framework from this principle, Libra will differ majorly from other crypto-currencies in one key aspect. Most crypto-currencies are decentralized, meaning no central authority regulates its value and flow. However, this makes such currencies unstable. Facebook’s goal is to create a stable crypto-coin, and, thus, it will be opting for a centralized variant.

This simply means the cryptocoin’s value will be pegged against several monetary assets low in volatility or less liable to change.

Scrutiny from Regulatory Bodies

Facebook has been under strict surveillance this past year or so due to multiple antitrust allegations against it. These mainly include but aren’t restricted to privacy issues, attempts at dodging competitions through mergers with potential rivals, and politically biased content.

With such allegations against its back, the newly launched cryptocurrency Libra and related Libra Association are naturally being viewed with a critical eye by authorities.

The main concern across boards seems to be its effect on global financial stability, in case the crypto-currency catches on. It can potentially overpower a country’s official currency if used widely. The use of Libra is also expected to affect monetary policies in many regions.

Other concerns regarding Libra are consumer data privacy, money laundering and fraud, and the storage of user transaction data.

These charges provide a decent picture of the reasons why one-fourth of Libra Association’s founding members decided to pull out in such quick succession. It has also been reported that two democratic senators wrote to VISA, Mastercard, and Stripe Inc., urging the companies to leave the project, failing to do which would cause stricter regulatory scrutiny against them.

Additionally, officials in Europe expressed plans to ban Libra in parts of the continent so as to prevent it from affecting monetary policy.

Libra was initially expected to release sometime early in 2020 but has evidently faced a number of setbacks along the way. A statement earlier this year hinted to its uncertainty about the project. Despite everything, it seems the project might come to eventual fruition.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

₹90 Crore Per Hour: That’s What Mukesh Ambani Added To His Wealth During COVID Era

Today the "IIFL Wealth Hurun India Rich List 2020" was released and guess who kept maintained his...

Can Tata Super App, With the Backing of Walmart, Take On JioMart?

In August, Tata Group, in a move to likely counter the offerings of the Jio umbrella, declared that they are in the...

The Raining Discounts Are Coming As Flipkart And Amazon Gears Up For Festive Season Sale

The festival season is about to begin and eCommerce majors in India Amazon and Flipkart are aiming to make the most of...

Amazon, Google And Microsoft Are Extreme Angry With TRAI

The big three of the tech industry - Amazon, Microsoft And Google - seems to be quite annoyed. Cloud...

New Android Malware Steals Your Banking Credentials And Let Hackers Access Your Smartphone

If you are an active user of banking apps on your Android smartphone, you must pay close attention to it.

An IT Service Help Desk Is Essential To Drive Business Growth

There's no debate about the fact that an IT service desk, when properly run, leads to both short-term and long-term business growth....

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This