Facebook launched its plans for a cryptocurrency named Libra less than a month ago, but is already facing regulatory and legislative barriers in Washington DC.
As a result, some technical executives doubt that the project will be launched by 2020.
"I think in two years we will be like this:" Do you remember the Facebook thing? Libra? Said Bismarck Lepe, CEO of Wizeline, a product development company in San Francisco.
Facebook quit Libra and its Calibra to Digital Wallet on June 18. Regulators responded quickly.
The House Financial Services Committee Democrats demanded Facebook On Wednesday, Jerome Powell, chairman of the US Federal Reserve, told House Financial Services with The Committee that Libra "raised serious concerns about privacy, money laundering, consumer protection, financial stability"
Facebook said Bloomberg on Tuesday that Calibra will not launch in India, where the country's central bank banned financial firms from handling cryptocurrencies last year
With so many legal obstacles in store, many in the technology sector told CNBC they did not expect it that Facebook will be able to launch Libra and Calib As planned, by the first half of 2020.
"Although scale innovation certainly has potential, we should expect greater control not only from the federal government but also from the state level, not to mention regulators in many Markets outside the US, "said Anuj Nayar, Financial Health Officer at LendingClub.
To successfully launch Libra and Calibra, Facebook must overcome numerous financial regulations to combat money laundering, money transfer, securities and privacy, said Charley Moore, CEO of Rocket Lawyer, a San Francisco-based company that provides online legal services. Facebook will also have to search for all of these regulations as they vary from region to region, Nayar said.
"In the US alone, it can vary by city, state, and state," he said. "Given the breadth of Facebook reach and the big aspirations of the new Facebook medal, it's hard to predict which area is the biggest challenge for them."
In addition to the stringent regulations associated with financial services, Facebook could be threatened on the basis of pushbacks. According to Dimitri Sirota, CEO of BigID, a New York-based privacy firm, the company is successful in matters of trust and privacy.
"Facebook will not get on with Libra if consumers have concerns about their financial data being compromised or misused, and regulators do not trust Facebook to protect that data," Sirota said.
Even companies that want to see Facebook as a success With Libra, you have concerns about whether it will happen.
Abra, a digital wallet startup in Mountain View, California, plans to support Libra as it becomes available, said CEO Bill Barhydt. But Facebook faces a great risk of getting past the regulators.
"That's why they had to announce this earlier than it was available ̵
At least one early Facebook investor, Matt Ocko, is actively at the root of regulators holding Libra before launching.
"Many countries are justifiably crazy about the unscrupulous immoral Facebook vampire salmar whose tentacles have invaded the control of their countries' currency and banking systems," he said. "I hope to God that enlightened regulators are hot on the heels of this thing."
In the meantime, the company is preparing for questions. David Marcus, the Facebook boss who leads the project, is scheduled to testify to the Senate Banking Committee next week, actively seeking feedback from regulators and others.
"We want and need governments, central banks, regulators, not-for-profit organizations and other stakeholders at the table and appreciate all the feedback we have received," Marcus wrote Monday in a letter to the committee to comment on the skepticism of the technology. To refer industry to Libra, Facebook referred to Marcus' letter.
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