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Ethereum co-founder said that Libra should not be run by Facebook because the social media giant still hasn’t earned the people’s trust.
The fate of Facebook’s Libra cryptocurrency is pretty much hanging in the balance and has somewhat been so since it was first announced a few months ago. There has been so much backlash from authorities, with Congress specifically asking Facebook to halt the development progress until further notice. Now according to Ethereum co-founder Joseph Lubin, the biggest problem that the Libra faces is Facebook itself.
Lubin recently spoke to CNBC’s Squawk Box, and specifically mentioned Facebook’s problems with trust, as very potent fuel for the problem:
“I’m a big fan of projects like Libra. [However], I don’t believe that Facebook … with the concerns that we have with respect to trust and personal identity in Facebook, should be driving that project.”
The Ethereum co-founder who is also the founder of Consensys said that even though Facebook is the Libra’s greatest asset, the project “suffers from its greatest asset.”
As part of its plans to ensure autonomy and probably stem backlash it may have foreseen, Facebook also announced the Libra Association as a separate organization that will govern the project. At the time, 28 member organizations were revealed as founding members, including Facebook itself.
However, because of all the backlash and uncertainty, the project was hit by a major hurdle when PayPal announced it would pull out of the project. Before long, Mastercard, Visa, eBay, Stripe, Mercado Pago and Booking Holdings, all followed suit, abandoning Facebook and the Libra. At the moment, there are 21 members in the association and Facebook has said that they have received many more applications from many companies, who have all indicated interest in the association.
Lubin has however suggested that one way to circumvent the regulatory issues Libra is facing in both the European and American markets, is to launch the product in other jurisdictions that might be a bit more welcoming, and then work their way from there. He said:
“My own hope for them to actually launch Libra was to launch it in a bunch of small-and-medium sized nations and bide their time and eventually, launch it in European … and the American nations that are resistant.”
Facebook CEO Mark Zuckerberg has told Congress in a testimony that the Libra will not launch until authorities are satisfied with the project and give it their greenlight. However, this seems very unlikely because Congress would most likely not be backing down anytime soon. Zuckerberg recently endured hours of grilling from Congress about the project where he was repeatedly fired at, regarding several issues. The head of the Calibra project David Marcus, also had the same fate when he was questioned by Congress as well, months ago.
Just a day before Zuckerberg was set to appear before Congress, Marcus fired an indirect warning at the U.S. government, saying the U.S. will lose its race to China, if it doesn’t embrace crypto more.