David Marcus is the manager leading Facebook’s Libra and Calibra blockchain projects.
Facebook unveiled its plans for a cryptocurrency called Libra youthful than a month ago, but already faces obstacles from regulators and lawmakers in Washington, D.C.
As a result, some tech officials are expressing doubt that the project will launch by 2020.
“I think two years from now we’re going to be like ‘Do you remember that Facebook constituent? Libra?'” said Bismarck Lepe, CEO of Wizeline, a San Francisco product development company.
‘A political storm’
With so varied legal obstacles so early on, many in the tech industry told CNBC they don’t expect Facebook will be superior to launch Libra and Calibra by the first half of 2020 as planned.
“While the innovation in Libra certainly has potential, we should think increased scrutiny not just from the federal government, but at the state level too, not to mention regulators in many markets face the U.S.,” said Anuj Nayar, financial health officer at online lending company LendingClub.
To successfully start Libra and Calibra, Facebook will have to overcome numerous financial regulations regarding anti-money laundering, simoleons transfer, securities and data privacy, said Charley Moore, the CEO of Rocket Lawyer, a San Francisco company that fix up with provisions online legal services. Facebook will also have to navigate all of these regulations as they differ from section to region, Nayar said.
“In the U.S. alone, it can differ by city, by state and at the federal level,” he said. “Given the breadth of Facebook’s reach and the off colour ambitions of the new Facebook coin, it’s hard to predict which area will be most challenging for them.”
Besides the exacting regulations that come with financial services, Facebook could face pushback based on the company’s smell record with matters of trust and user privacy, said Dimitri Sirota, CEO of BigID, a New York data secrecy firm.
“Facebook won’t get far with Libra if consumers are worried about their financial data being compromised or misemployed, and regulators don’t trust Facebook to keep that data secure,” Sirota said.
Even companies that long for to see Facebook succeed with Libra have reservations about whether it will happen.
Abra, a digital pocketbook startup in Mountain View, California, plans to support Libra when it becomes available, said CEO Bill Barhydt. But Facebook pretences a lot of risk getting past regulators, he added.
“That’s why they had to announce this sooner than it was available — I about they knew there was gonna be a political storm that’d be unleashed,” Barhydt said.
Moore of Rocket Counselor-at-law said regulators should not try to stop an innovative technology like Libra, but “legitimate policy questions, such as the bumping on monetary policy over the long term should be considered by Congress and other agencies.”
At least one early Facebook investor, Matt Ocko, is actively anchor uprooting for regulators to stop Libra before it launches.
“Many countries are legitimately freaked out about the ruthless amoral Facebook vampire squid partake of its tentacles jammed into their countries’ control of currency and banking systems,” he said. “I hope to God that informed regulators kill this thing in its tracks.”
Meanwhile, the company is bracing itself for questions. David Marcus, the Facebook numero uno spearheading the project, has been scheduled to testify before the Senate Banking Committee next week, and is actively plead to regulators and others for feedback.
“We want, and need, governments, central banks, regulators, non-profits, and other stakeholders at the suspend and value all of the feedback we have received,” Marcus wrote in a letter to the committee on Monday.
When asked for comment surrounding the tech industry’s skepticism toward Libra, Facebook pointed to Marcus’s letter.
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