Lawrence GashAt least three members of Facebook’s planned digital currency Libra have privately considered abandoning the association only two months after it was announced, the Financial Times reported on Friday, August 23.
This potential volte-face comes in the wake of growing regulatory and political scrutiny. Earlier this week the European Union announced an antitrust probe, while data protection officials from a variety of Western countries released a forceful statement highlighting privacy, money laundering and tax evasion concerns.
The 28 founding members all made a non-binding pledge to invest upwards of $10 million in the project. These ranged from traditional payment giants Visa and Mastercard to tech giants Uber and Spotify.
Facebook’s conception of Libra as an “association,” was likely thought to distribute the regulatory and press spotlight more widely. Two of the 28 have however admitted to the FT that they were concerned about the intensity of this spotlight.
Another founding partner said: “I think it's going to be difficult for partners who want to be seen as in compliance [with their own regulators] to be out there supporting [Libra].
Facebook has not commented on these claims of a disunited front, although one of Libra’s backers observed that “Facebook is tired of being the only people putting their neck out.”
Political goodwill towards Facebook in the United States is in short supply. Only last month, lawmakers asked David Marcus, the head of Facebook’s financial services subsidiary Calibra, how they could be expected to trust a company that has only recently been fined $5 billion for misuse and inappropriate collection of its customers' data.
Public trust also seems to be limited. A CivicScience poll recently found that 77% of Americans have no trust in Facebook’s use of their personal information and data, with 86% of those surveyed saying they have no interest in Libra.
