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Monday, February 3, 2020

Facebook's Project Libra Continues to Face Headwinds

We covered Project Libra initiated by Facebook here some last year. While the project (which involves Facebook attempting to launch another payment system based on its own "Libra" cryptocurrency) attracted a lot of attention, we did note that we expected it to also encounter a lot of resistance as well.


That has proven to be the case as the two articles linked below point out. Below is a brief excerpt from each article.

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Coindesk.com - Vodafone is the Latest Big Company to Quit Project Libra

"Vodafone and Libra both confirmed Tuesday the company is no longer part of the consortium. Vodafone will dedicate resources previously intended for Libra to its well-established and successful digital payment service M-Pesa, which the company plans to expand beyond the six African nations currently served."

. . . . 

While Libra originally intended to launch in the first half of 2020, this timeline was thrown into doubt last year when Facebook CEO Mark Zuckerberg said regulatory concerns might push back the date.

Speaking on stage at the Blockchain Central panel held by the Global Blockchain Business Council at Davos, Disparte (Libra Association) further hinted at a possible delay in the launch schedule."








Bloomberg - Facebook's David Marcus Vows to Move Forward with Libra

"The Facebook Inc. executive responsible for the embattled Libra cryptocurrency said he doesn't fault companies that pulled out of the project, adding that he's optimistic more organizations will sign on despite intense opposition from politicians who seem to fear financial innovation."

. . . . .

"Visa, Stripe and Mastercard received letters earlier this month from Democratic U.S. Senators Sherrod Brown and Brian Schatz that urged the companies to "carefully consider" how they would manage potential risks associated with Libra before proceeding with the project. Asked if he thought the letter constituted a threat from the senators to the companies, Marcus responded, "I don't know, what it did it sound like to you?" He added that such correspondence can have a "chilling effect."





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My added comment: We continue to report here that major changes to the present monetary system are likely to be gradual in nature unless some kind of systemic crisis forces more rapid change. As these articles continue to illustrate, the status quo is quite powerful and hard to change without some kind of outside force impacting its stability.

Added note: Upcoming this month are several interesting articles on the future prospects for various kinds of digital currencies. These artciles will include some of the latest information from the World Economic Forum, the Bank for International Settlements, and the OMFIF based in London. If you review all these articles, you will be pretty well caught up with some of the latest information on this topic. 

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