When Facebook introduced the Libra cryptocurrency, representatives of the social network tried everything to convince users of the security of their new product. Former president of PayPal holding, David Marcus said that Libra was a unit of measurement in ancient Rome, as well as an astrological symbol of balance and justice:
“Freedom, justice, money – these are things that we expect from this undertaking.”
But whatever he says, as soon as the new cryptocurrency becomes available in 2020, Facebook will have even more user data at its disposal, and the company will be able to penetrate deeper into the digital life of users. Facebook still apologizes for its past mistakes, but, at the same time, tries to convince users of the reliability of Libra. Edward Jones Investments financial company analyst Dave Heger says:
“Will people feel safe using Facebook as an e-wallet? When we come to money and the possibility of losing them, I think people will be skeptical about the company’s initiative with such an ambiguous history.”
Regulator’s pressure on Facebook is stronger than ever. The US Federal Trade Commission is completing an investigation to ensure user privacy, which could lead to a company’s $ 5 billion fine. Presidential candidates Bernie Sanders and Elizabeth Warren have already called for a thorough study of how IT giants affect the lives of Americans. In the spring, Facebook co-founder Chris Hughes announced that the social network should cease to exist. Ohio State Senator Sherrod Brown said:
“We cannot just allow Facebook to launch an extremely risky cryptocurrency without any verification. I urge financial regulators to examine it carefully and make sure that nothing threatens the users.”
Facebook hopes to dispel all doubts by separating payment information from social network data. The company has created a Calibra division that will be responsible for e-wallet products (including cryptocurrency) and store the users’ financial data. Calibra will be aware of the fact that the user has transferred money to a friend or bought a pair of shoes – the company plans to store this data on its servers, and the social network will not get access to them.
According to Marcus, this separation is necessary to win consumer confidence and get approval from regulators. Specialist in cryptocurrency and financial technologies, professor at the business school of Columbia University Farrochnia says:
“The distinction should be super-transparent. There are very clear rules regarding the use of financial transaction data, and I am sure that, taking into account the past of Facebook, the company will be closely watched.”
As a reminder, according to a new research, only 2 percent of US residents trust Libra more than bitcoin. A total of 1,799 U.S. adults responded to the survey carried out in mid-June. 40 percent of respondents said they’d trust the public cryptocurrency more, while 19 percent said they’d trust both options about the same.
The poll indicates, that the lack of trust in the Facebook’s stablecoin is also powered by the lack of interest in the project. When asked if they were interested in Facebook’s crypto and wallet, 86 percent of respondents said not at all. Around 5 percent expressed interest.