libracoin - facebook’s crypto currency
Facebook recently touted their then-upcoming cryptocurrency as the next big step for the company. But as the social media giant throws their hat into the crypto ring with its Libra project, are there problems brewing for it even before the cryptocurrency establishes its presence?
There is however a concern that may be crucial to Libra's acceptance: privacy. With multiple instances of data leaks - and the flat out sale of user data - Facebook may not get the response they expected to their cryptocurrency. Any potential Libra user will certainly ask themselves if they want to entrust their money to a company with a record of data breaches? The answer to this question may well mean life or death for Libra.
The administration of Facebook's digital currency falls under the purview of the Libra Association, currently numbering 28 members and led by the social media company itself.
However, Facebook is far from the only impressive name on that list - a number of the biggest payment companies previously joined the project including Mastercard, Visa, Stripe, Paypal and Vodafone. Their reasons for doing so are certainly numerous but with Facebook reporting 2.4 billion active users on a monthly basis, it is obvious that Libra as a currency would be in a starting position most other newcomer cryptocurrencies could only dream of.
Jorn Lambert, executive vice president of Digital Solutions at Mastercard, is quoted as saying that Libra presents a novel way of combining a cryptocurrency with a private governing body and structure to create something potentially stable and ubiquitous enough to be used for payments worldwide, and his sentiment may be shared by others, since the list of Libra members also includes Coinbase, eBay, Spotify and even Uber and Lyft.
Reports surfaced recently about an investigation by the European Union antitrust regulators into the Libra project's activities.
The European Commission is quoted as expressing concerns regarding Libra's possible effect on its rivals, specifically shutting them out and gaining unfair advantage in the crypto market.
This has prompted the EU authority to investigate Libra for "potential anti-competitive behaviour" not even two months into the project's life. But it is precisely the enviable starting position that has the EU regulators raising eyebrows including the possibility that Facebook is abusing its dominance and forcing others to join in for simple fear of missing out.
There are also questions about the managing of the Libra Association; and the EU regulators are interested to know how exactly Facebook plans to integrate Libra-backed apps with Messenger, WhatsApp and its other messaging service.
The fact that the EU regulator has decided to step in and scrutinize the situation this early may be a good sign that there will be concrete and specific actions taken.
This comes on the heels of a line of developments that have led to the sentiment that antitrust authorities in the US have been struggling with reigning in the dominant Silicon Valley companies.
Examples such as Google acquiring DoubleClick in 2008, further cementing its control over digital ads immediately come to mind - and even Facebook as well, which had, with the acquisition of both Instagram and WhatsApp firmly entrenched itself in the position of leading social network.
Now, with the end of the year soon coming, Libra is seeing more than expected backlash from the Eurozone. But Zuckerberg is still defending Libra by comparing it some of the ‘most meaningful innovations’ of our time while former Facebook manager Horsley shared some insights into the whole Libra ordeal, giving his side of the story. The fight for Libra will undoubtedly continue, with the outcome yet to be revealed.
MASTERCARD & VISA
But even as Facebook acquires strong allies in its Libra project, some of those allies have been making their own plans for stepping into the cryptocurrency arena. Both Mastercard and Visa are stepping up their crypto game even as they take their seats on the Libra Association members board. Mastercard is deep in development of its own cryptocurrency, a move that has once more confirmed its aspiration of being more than just a card company.
Mastercard Senior Vice President Seth Eisen is quoted as confirming this to be part of company's aim of always creating new value, of which blockchain and cryptocurrencies comprise a significant part. Visa has recently launched Visa B2B Connect, a payment system aimed at business-to-business transactions, with said system being partially based on blockchain technology.
Visa B2B Connect was launched in June 2019, in 30 markets across the globe and Visa plans to extend the reach to 90 markets before the end of 2019.
However, the development was not smooth, with Visa starting off the project in 2016 partnered with Chain but then replacing it with IBM, e-payment operator Bottomline Technologies and the FIS fintech company.
Visa's entry into the blockchain arena puts it into direct competition with both cryptocurrency startups such as Ripple as well as established payments players - for example Barclays and BNY Mellon and their Utility Settlement Coin project.
COMMERZBANK & DAIMLER
It's not just social media giants making moves to provide their customers with payment options and services. Daimler Trucks have joined forces with Commerzbank for a pilot program called Daimler Truck Wallet.
The aim of the project is developing a payment service based Commerzbank's e-euros and utilizing the Corda blockchain and make the service available to drivers of Daimler vehicles. This payment service, approved by the German Federal Financial Supervisory Authority, would allow recipients of e-euros to convert the digital cash into their bank account via Commerzbank.
We are teaching trucks how to pay! The newly developed #digital Truck-ID & Wallet are both part of a pilot project designed to make life easier for drivers. It enables e.g. autonomous payments at #electric charging stations & much more 👉 https://t.co/AtRxZcG3P4 #blockchain pic.twitter.com/01sPF2iNCf— Daimler Trucks & Buses (@DaimlerTruckBus) August 8, 2019