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06/23/2019
As Facebook’s Libra Provokes A Slew of Questions, An Expert Struggles With the Coin’s ‘Justification’
Digital Transactions
Facebook Inc. is expected to release details this week, perhaps as early as Tuesday, on its Libra cryptocurrency initiative, but for now what’s known about the project has at least some experts shaking their heads. “Why a cryptocurrency, and why Facebook?” asks Tim Sloane, who follows digital currencies as vice president for payments innovation at Mercator Advisory Group, Maynard Mass. “It would be easier to understand if Facebook did a private currency, like WeChatPay, utilizing existing payment rails. It is hard to understand what cryptocurrency adds in this context.”
Sloane adds that Facebook’s direction of the project, which includes involvement by Mastercard Inc., PayPal Holdings Inc., Stripe Inc., Visa Inc., and at least eight other companies, could prove to be a liability rather than an asset. While the huge social-networking company brings a base of 2.4 billion users worldwide, it has attracted negative attention in recent months for questionable privacy practices. “They also have an extraordinary level of regulatory scrutiny that makes the regulatory risk much worse,” Sloane notes in an email message.
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