Cryptocurrency has always been difficult to sell - and especially in the case of Facebook.
Social network attached great efforts to avoid statusthe owner. When Facebook officially announced the launch of the libra in June, it also planned to set up a Calibra branch, which was supposed to manage the project with the help of various partners to ensure a “separation of social and financial information”. This was a necessary step, as the last two years Facebook has been shaken by scandals related to the incorrect use of data that it collects from 2.7 billion people who use one of its platforms every month.
Facebook's further attempt to distance itself fromLibra became the Libra Association, which, according to its project document, is an "independent, non-profit membership organization." This group includes such traditional payment networks as Visa, Mastercard and PayPal, as well as several other large technology and telecommunication companies, non-profit organizations and venture firms. The association was supposed to be based in Geneva, Switzerland, a historic and respectable banking center located as far as possible from Facebook headquarters in California.
However, this was not enough. Libra was firmly associated with Facebook from the very beginning, as it showed unprecedented attention to this endeavor, which would be very ambitious even for a company with an impeccable reputation. David Marcus, Facebook’s top project manager, appeared before the US Congress just a month after the company announced the launch of the libra. Regulatory pressure has even affected Facebook partners, as lawmakers have insisted that many project supporters should refuse to participate in it.
The result was predictable: by Monday noon, seven partners left the project, including Mastercard, Visa and PayPal.
Leaving the project organizations involvedthe provision of financial services, can especially clearly signal the beginning of the end of the libra. As Lisa Ellis and Michael Nathanson, analysts at MoffettNathanson, noted earlier this month, without support from major payment networks, as well as without their “necessary, deep experience in the field of payments, reliable payment brands, ubiquity and settlement systems, as well as without their relationships with all the major financial institutions, governments and regulators around the world, ”this project is likely to be doomed. In other words, they have everything that Facebook does not have and what it needs to successfully launch the libra.
Analysts rightly point out that this project,probably met such active resistance because of the “tarnished reputation” of Facebook in the eyes of regulators. However, the company itself is not yet talking about its fiasco. Markus on Twitter called the news about the departure of partners "release." In his opinion, the project is "worthwhile, judging by the pressure exerted on it."
And although no one expected that the libra would be launchedeasily, many analysts and investors initially thought that it would allow Facebook to diversify beyond its traditional advertising business, which is increasingly criticized for the misuse of user data. In the month since the announcement of the libra, Facebook shares rose 7%. However, most observers believed that reliable partners would be the key to success. Facebook was going to launch the libra in the 1st half of 2020 and hoped that by this time the number of members of the association would reach about 100. At the moment there are only 21 of them, and it will be difficult to launch a new cryptocurrency.
It seems that there are few real friends on a social network with billions of users.