Tensions High Within the Facebook Libra Association as Members Consider Quitting

Tensions High Within the Facebook Libra Association as Members Consider Quitting

Growing regulatory pressure appears to have spooked some of the founding members of the Libra project. It appears that things might be getting too hot for some members to handle. A Financial Times report indicates that two members, who were not named, were seriously considering backing out.

Three Members are No Longer Sure

The report indicates that these two members have already brought up the question of what would be the right next step to take in this project if they were to exit. A third member is worried that the scrutiny facing the Libra project could extend to their business activities. This has left many speculating about which company fears their skeletons will be dragged out of the closet.

A source said that for most members who wanted to be seen as complying with their local regulators, it would be difficult to continue working on the Libra project. For a few months, Libra was just a rumor and nobody had a clue about it until the official announcement was made. It appears the decision to announce it was rushed before members could come up with solid plans on how the rollout would take place.

Some have even blamed Facebook for rushing the decision without first considering the regulatory pressure. It is being said that Facebook should have taken time to analyze how regulators would respond to this project to reduce the pushback.

Facebook Libra Might Never Launch

The recent press leak is further evidence that regulatory pressure might stop Libra in its steps. It shows that members of the Libra Association are having serious discussions about it behind closed doors. One source even said Facebook was throwing accusations at other members. Apparently, Facebook feels slighted for being the only ones sticking their neck out for the project.

Mounting Regulatory Pressure

The pressure is mounting for the Libra project in the US and outside. This week, it was reported that the European Commission was looking into the project over potential violations of antitrust laws. The EU has expressed fears that the Libra project could potentially shut out rivals.

There are fears that the project will come with competition restrictions, especially regarding how data is exchanged between members and how user data will be utilized. One area the European Commission is likely to look at is how Facebook will integrate data form Libra into its apps such as Messenger.

The potential that Facebook could push out the competition especially on its platform is quite easy to understand. However, another potential problem is the mishandling of user data by the firm. As a result, data protection is another growing area of concern. For instance, it was revealed in August that the company has been outsourcing transcription services for audio data generated by users.

This recent news combined with Facebook’s history with user data has regulators in Europe and elsewhere worried. However, the Libra Association has made it clear that it will only roll out in jurisdictions where it attains full regulatory approval.

 

This article was written by Eric Scriber for Bits And Tokens, a blockchain media company. 

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