By Facebook’s Stablecoin Libra has been on the radar of authorities ever since it was announced. Their vision of banking the unbanked is far from reality as the regulatory hurdles have been damaging to the digital currency’s development. Libra had no hope of launch in India or China, and its development was completely blocked by France and Germany.
Even Facebook CEO Mark Zuckerberg said in a testimony on October 23, that
“I want to be clear: Facebook will not be part of launching the Libra payments system anywhere in the world until US regulators approve.”
Looks like the company is now shifting their focus towards a more traditional payments system, which will please the regulators. As of now, Facebook has announced on November 12 that it will be introducing Facebook Pay, a new payments system that will facilitate payments across Facebook, Messenger, Instagram, and Whatsapp and is quite similar to PayPal’s venomo app.
Deborah Liu, VP of marketplace and Commerce at Facebook, said:
“People already use payments across our apps to shop, donate to causes and send money to each other. Facebook Pay will make these transactions easier while continuing to ensure your payment information is secure and protected.”
In order to avoid further regulatory problems, the announcement also mentions that Facebook Pay is “built on existing financial infrastructure and partnerships.” It looks like the company wants to play safe this time as the announcement further explains that, Facebook Pay will not be related to the “Calibra wallet and the Libra network,” project in any way.
The new application will start rolling out this week itself on all Facebook’s social applications in the United States for “fundraisers, in-game purchases, event tickets, person-to-person payments on Messenger and purchases from select Pages and businesses on Facebook Marketplace.” Facebook vows to bring this new payments system to more people and places in the future.
A rough journey
Up until now, the biggest loss for Libra was losing seven of its original backers at the beginning of October. The first to leave the Libra association was leading U.S payments processor PayPal. The company said that it would forgo any further participation in the affairs of the Libra association and focus on its own core business.
This move was soon followed by other major Libra backers like Visa, Mastercard, Stripe, eBay, Mercado Pago and Booking. Each entity cited various regulatory concerns as the sole reason to back out of the Libra association.
Those that remained associated were under immense tension from Senators Brian Schatz (D-HI) and Sherrod Brown (D-OH), who warned about the risks around the launch and development of Libra. Steven Mnuchin Treasury Secretary of America even called it a national-security concern.
Moreover, various big names have shown their lack of support for Facebook’s stablecoin. As Coinbeat reported earlier, Jack Dorsey, the CEO of Twitter, said that the popular social media network would never join Facebook’s Libra Association.
Comments