Facebook’s long-anticipated cryptocurrency venture, Libra, could go live as early as January, three people involved with the matter told Financial Times this week. But don’t get too excited just yet: Thanks to a torrent of federal scrutiny and many of its chief investors bailing on the project, its scope has been significantly scaled back.
The Facebook-led Libra Association now intends to launch just “ a single coin backed one-for-one by the dollar” with plans to roll out additional currencies and a “digital composite” of all its coins at an unspecified future date, one source told the outlet. It’s a far cry from Libra’s original sales pitch back in June 2019 to “reinvent money” and “transform the global economy” by leveraging Facebook’s billions of users to scale its global, blockchain-based payment network.
But that was in the before times. Before the covid-19 pandemic wreaked havoc on the global economy, for one, and before a slew of troubles plagued the project. Seven of the Libra Association’s high-profile members, including PayPal, Stripe, Visa, eBay, and Mastercard, have pulled out of the project since then. Their exodus came after financial regulators in the U.S., India, China, the European Union, and elsewhere publicly opposed Libra and the so-called “crypto mafia” behind it and voiced concerns that the cryptocurrency network could threaten monetary stability or be flooded with money laundering schemes. Officials also worried that Facebook, a company that’s no stranger to screw-ups for the history books, was attempting to circumvent their control.
Facebook also ended up rebranding the digital cryptocurrency wallet, which it owns outright, that it had planned for the project. The company changed it from Calibra to Novi after the former’s logo became the subject of a trademark infringement lawsuit.
Libra’s official launch date remains in limbo for now, but could come as early as January pending approval to operate as a payment service from the Swiss Financial Market Supervisory Authority, sources told Financial Times under the condition of anonymity. As for Novi, one worker familiar with the matter said that the wallet was “ready from a product perspective” but Facebook’s holding back on its launch and instead focusing on “half a dozen high-volume remittance corridors” including the U.S. and several Latin American countries.
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