Is Facebook’s Libra Project Already a Miscarriage?

Abstract

Facebook’s claim of Libra blockchain as a decentralized peer-to-peer electronic cash system is a blunt lie; if Facebook overcomes the massive regulatory hurdle and receives appropriate approvals, Libra will initially start off as a decentralized permissioned blockchain with a trusted-third party. Unlike Bitcoin’s purely peer-to-peer decentralized permissionless blockchain without a trusted third party, all transactions on Libra blockchain will be governed by the Libra Association as a de facto central authority comprising 28 founding-members most of which are for-profit heavyweight firms from the United States such as Visa, MasterCard, PayPal, Facebook Calibra, and eBay. Facebook’s Libra coin is a recent invention, but with apparent signs of a miscarriage. Facebook’s already troubled past for violation of privacy and exploitation of users’ data (i.e. data disclosure scandals Cambridge Analytica) has intensified the opposition among authorities and skepticism among industry participants. In the midst of Facebook’s planned launch date of first half of 2020, Libra is still running impetuous into increasing opposition from all sides; central banks, regulators, law makers, and tax agencies. As with any new paradigm-shifting technology (i.e. blockchain), Libra will cause a serious disruption in the short-term to the existing ecosystem of more than 2,400 digital coins that has taken a decade to form; however in the long-run, Libra as a stable global crypto-currency promises to revolutionize electronic payment systems and money transfers by enhancing financial inclusion and global stability as a public good. To launch Libra cryptocurrency, Facebook should not attempt to satisfy all of the concerns or issues brought by different branches of governments because this is both impractical and implausible to accomplish. A decade has passed since Bitcoin’s debut in January 2009, and to this date still many countries throughout the world do not have any regulation dealing with cryptocurrencies. If Facebook Libra does not sputter out, it will spur central banks to launch their own cryptocurrency projects.