Wed. Aug 21st, 2019

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Doubts About Facebook Cryptocurrency.

2 min read

The biggest selling point of Facebook’s new crypto currency, Libra, is that it has 27 companies backing it up. Among the list is Uber, Visa and Mastercard. But some of those partners are joining Libra with doubts. They signed non binding agreements to oin the project partly because they knew they were not supposed to use or promote the digital token. The agreement states that they could back out of Libra if they did not like where it was going. Executives from seven out of the 27 companies said but in an anonymous statement, due to the sensitivity of the matter. Although it was announced a week ago, Libra has already drawn uneasiness in Washington. Maxine Waters, the chairwoman of the House Financial Services Committee and a Democrat from California, quickly scheduled hearings to examine Libra and told Facebook to stop development of the project until big questions are answered. So the House hearing is set for July 17. The Senate is expected to hold a hearing on the same issue the day before.
Facebook said the 27 partners that it announced last week were giving at least $10 million. Thereby joining an association that would govern the Libra cryptocurrency, which is set to be introduced next year. But no money has changed hands so far. A number of partners said they would decide whether to join the association and make the payment after there is more clarity on how Libra will work.



 

The largest American cryptocurrency company, Coinbase, was one of Libra’s 27 initial partners. But when the partnership was announced internally, several Coinbase employees expressed concern about their company joining forces with a giant company like Facebook. This is due to a spotty record on issues that matter to cryptocurrency fans, like privacy, according to two company employees. Facebook had hoped its partners could help Libra handle some of the critics and give the project some distance from the social networking giant and its recent legal problems. But even before the project began, potential partners had their own concerns. Facebook approached a number of big financial companies, including Goldman Sachs, JPMorgan Chase and Fidelity, about participating in the project, according to two people briefed on the discussions. The financial companies declined to join, in part because of regulatory questions about cryptocurrencies

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