The major components of the Facebook led cryptocurrency Libra has faced setbacks over the last two weeks that have basically crippled the initiative.
PayPal pulled out two weeks ago, followed by Mastercard, Visa, eBay and others over the last week.
Scrutiny from regulators was getting extremely tight and this presumably made the major financial institutions too nervous to be associated with the initiative. The Bank of England announced that the rules that would allow Libra to launch would be of the highest levels demanded of financial institutions.
In a way, it will be sad if it does not work because the idea of being able to seamlessly transfer money is at the height of popularity at the moment. And makes perfect sense. The problem is, of course, that the initiative was being unfurled at just the moment when politicians are looking for crusades for their election runs and regulators are spying a huge source of income from fining big tech companies, from which to boost their tax coffers.
The question is what impact this series of serious setbacks will have on Facebook and by association other social media platforms.
The answer is probably pretty major.
Facebook desperately needed something new to defend its ever more fragile, one major revenue stream, business model. It makes Facebook look even more overblown than before.
The irony is that cryptocurrencies are getting to the point where everyone is scratching their heads and saying ‘well, as long as they are properly governed and regulated, we could possibly see our way clear…’ Even the outgoing Governor of the Bank of England recently said that the way forward for the financial security of our world is a global cryptocurrency.
Will we therefore see cryptocurrencies launched by banks and solid financial institutions?
If the answer is yes – and it almost certainly is yes – then why was so much pressure put on Libra and Facebook.
Was it simply because politicians wanted to slap down a company that has been abusing its freedoms for too long and needed to be taught a lesson?