Facebook Libra backers are having second thoughts

Visa Inc., Mastercard Inc., and other key financial partners of Libra, Facebook’s new digital currency, are reportedly reconsidering their investments, people familiar with the matter told the Wall Street Journal.

The report says that executives of some of Libra’s backers have declined to publicly support the project, despite requests from Facebook. With U.S. and European governments cracking down on Libra out of fear that it would destabilize government currencies, it appears investors are starting to second-guess their partnerships.

Libra has faced global outcry on every issue from market volatility to data privacy. CNBC reports that Benoit Coeure, a European Central Bank board member, recently warned that virtual currencies like Libra “could challenge the supremacy of the U.S. dollar.” Bruno Le Maire, France’s Minister of the Economy and Finance, even said he “cannot authorize the development of Libra on European soil,” says CNBC.

Facebook has already faced scrutiny over how it manages user data. Now, privacy experts have expressed “surprise and concern” over the lack of information Facebook has brought forth to explain how Libra would keep users safe. Central bankers have listed concerns for Libra such as money laundering, terrorism financing, and financial stability, and are only getting vague answers in return, according to another CNBC report.

As of July 2019, Facebook had more than 2.4 billion monthly active users. But on top of privacy concerns from potential users, without backing from a network of trusted financial partners, Libra would likely have trouble solidifying a user base.

Executives of the Libra Association, a Switzerland-based consortium that includes tech giants like Uber, will reportedly meet in Washington D.C. on Thursday and in Geneva Oct. 14 to review a charter and appoint a board of directors, according to the Wall Street Journal‘s report.

Facebook has attempted to calm concerns over volatility and said that since Libra is tied to currencies, it will maintain a stable value. David Marcus, a Libra executive, says that Libra won’t “threaten the sovereignty of nations when it comes to money,” according to CNBC. 

Dante Disparte, a member of the Libra Association, has said the organization is committed to protecting people’s data.

“As much as Libra represents an opportunity for the world to make inroads on financial inclusion, we acknowledge the need to design an infrastructure that complies with global privacy requirements,” Disparte told CNBC.

Esther Bell

Esther Bell

Esther Bell is a writer for the Daily Dot. She recently graduated from Northwestern University with a degree in journalism, and her work has appeared in Bustle and Teen Vogue.