Facebook is now changing its plans for its Libra cryptocurrency project after months of rigorous regulatory pressure and political setback, as per a new report published on 3rd March 2020 from The Information published on Tuesday.
Release of Libra is delayed
As per this report, Facebook has no plans to make the Libra token — the actual blockchain-based cryptocurrency. It is in the process of associating with the nonprofit Libra Association which is the major part of its digital payments strategy. Facebook’s Libra project will be supporting both existing government-backed currencies, like the Euro and US dollar, and the Libra token when it is finally done and about to launch.
Calibra Digital Wallet of Facebook Delayed
The report says Facebook is delaying the launch of its Calibra digital wallet, which was a major showcase for the Libra currency by enabling anyone having a smartphone to get and store the cryptocurrency and then pay for various goods using this currency. This wallet will now support plenty of currencies and Libra would be just one of these currencies.
Calibra initially was expected to launch this summer, but now it is about to be released in October 2020 as per the above report. This wallet may not be made available all over the world after launch as expected. It may be available only to the government-supported currencies the Libra project supports in the app. This would further delay the Calibra’s rollout.
Calibra integrates with Facebook Messenger and WhatsApp
The above information further states that Calibra’s major money-storing and transfer features are going to come to both Facebook Messenger and WhatsApp also. It is still not clear about the deadline for this process. Whether it will be relative to Calibra’s planned October launch or not.
This is incorrect speculation that Facebook is not going to offer the Libra currency in its Calibra wallet. Facebook is going to provide it both and remain fully committed to the project. This has been confirmed by a Facebook spokesperson to The Verge.
The Libra project was first announced in June 2019. It was a risky initiative to revolutionize money transfer and place Facebook and its partners on the blockchain-based digital payments platform.
The Segmented approach of Libra Token and Blockchain Network
This project as divided into two parts: a Libra token, designed widely similar to other cryptocurrencies like Bitcoin but with basic differences that make it more stable and less of a speculative asset, and a blockchain network that would act as the technical platform of the token and the technology for confirming the ownership of transactions and token.
For Security purpose, Libra Association was formed
Facebook expected at least some scrutiny, so it developed a nonprofit, called the Libra Association. For this association, Facebook and its Calibra subsidiary would represent only one member. It has 27 companies and nonprofits at its launch. It was based out of Zurich, Switzerland and was responsible for monitoring the cryptocurrency’s development. It also oversees the blockchain network that would support it. This currency was to be supported by many assets. It includes several existing currencies from all over the world, offered by many participating members, including PayPal, Mastercard, Stripe, and Visa.
Libra faced Political backlash
Despite those precautions, the Libra project faced the backlash from the political platforms. Regulators were worried about Facebook’s potential influence on the project. As the company has conceptualized the idea and is looking for a financial interest in its success.
They also have concerns as to how to classify the Libra token, and how the entire platform could be regulated and by whom. As it stated its interest in entering into the lending segment also. Facebook expressed its interest at the time of Libra’s announcement. The major concern of all was the ability for the currency and the technology to allow people to take away money undetected and away from the banking system, which might lead to money laundering and other unwanted activities.
Moreover, the project started hitting several snags last year when on regulatory pressure Facebook and its various Libra defenders did not respond. This resulted in changing the project’s overall objectives by Facebook’s blockchain chief David Marcus who is a former PayPal executive running Facebook Messenger for years.
Hopefully in few months or 2021 Facebook would be able to dissuade the concerns and introduce its Libra currency if it could manage to work within the guidelines of different regulatory bodies monitoring and regulating currencies all over the world.