- Facebook head of Calibra David Marcus has described Libra is simply a new payment system similar to products offered by PayPal, Tencent, and Alibaba.
In an interesting interview with Fortune, Facebook head of Calibra David Marcus acknowledged that the company’s explanation about its Libra product was bumbled. Marcus told Fortune that he would have probably just focused on “what this thing really is, which is a new payment system” if he had the chance to do it all over again. Facebook has been promoting Libra as a new form of currency.
After Facebook established the “Libra Association,” government regulators and central bank officials have been questioning company executives out of fears that the social network would go around the government system of currencies and push for the use of alternative currencies mined by computers.
Government regulators and consumers have been wary about Facebook developing a currency system due to its data breaches, election interference issues, and the ease of false information distribution on News Feeds and messaging platforms.
But it turns out that Facebook was not planning to launch a currency. It was simply planning to launch a payment system similar to what is being offered by PayPal, Tencent, and Alibaba.
Facebook Libra does not have a plan about how or where it will be launched yet, according to a board member in an interview with Reuters. The project scope is due by the end of June, but it depends on the talks with regulators according to Patrick Ellis (one out of five board members of the Libra Association).
Making matters even more challenging for Facebook is that the company lost some of its previous backers for the Libra project, including Visa and Mastercard. Netherlands-based PayU is the only remaining international payments company in the association’s 21 members. Ellis serves as the general counsel of PayU.
“At this stage, there is no strategy set in stone for the markets or the product, or how it will actually get rolled out,” said Ellis via Reuters.
Libra is going to be backed by a reserve of assets like bank deposits and government debt, which is held by a network of custodians. The structure was designed this way in order to avoid the volatile price swings that affect other cryptocurrencies.
