Between the privacy scandals and antitrust scrutiny, Facebook is having a hard time convincing regulators that its Libra cryptocurrency is an idea worth putting into practice. Recently, several important backers of the project officially abandoned it, and others are planning their way out as well.
The Libra Association was founded to smooth out the regulatory approval process, but the widespread criticism around Facebook's practices has posed a significant roadblock in the US, where the Trump administration considers Libra a problematic proposition. On the other side of the ocean, France has vowed to do everything in its power to block Libra in Europe, as it threatens the governments' sovereignty over monetary policy - a sentiment echoed by Germany.
However, it appears that Facebook is open to alternative approaches if it means regulators will become more receptive. David Marcus, who is the head of the Libra project, said during a banking seminar that the group is even considering the idea of launching a series of stablecoins based on international currencies as opposed to a single, synthetic digital token that would be pegged on multiple currencies (50 percent US dollar, 18 percent euro, 14 percent Japanese yen, 11 percent British pound, and 7 percent Singapore dollar).
It's worth noting the remaining members of the Libra Association would prefer not to go that route, but they don't have many other options if they wish to speed up the approval process. This comes after regulators expressed concerns that Libra could disrupt the global financial system or facilitate money laundering and terrorism. They're also worried that given Facebook's privacy missteps, the initiative could turn into a new privacy nightmare for users.
Group of 20 financial overseers told Reuters that Facebook won't be able to launch Libra until it can meet strict regulations. Marcus believes the cryptocurrency is still on track for the originally planned launch date, but that looks increasingly unlikely as we inch closer to it. Major payment firms like PayPal, Visa, Mastercard, and Stripe have already dropped their support for Libra, which is not a good sign for a project with global ambitions.