Facebook’s Libra cryptocurrency partners considered withdrawing

Earlier, social networking platform Facebook announced the launch of the Libra project based on blockchain technology, which is essentially similar to the stable currency in the virtual currency industry. According to Facebook, this virtual currency can be used for cross-border transactions and settlements. For example, if the merchant supports the virtual currency, the user can directly initiate payment. At the same time, the Libra project will anchor legal currency such as US dollars, so users can also use the US dollar to exchange Libra virtual currency for stored value and transactions.

Since the release of the Libra project, Facebook has faced enormous regulatory pressures. For example, US regulators have repeatedly contacted Facebook to address potential issues. Regulators are most concerned about the potential money laundering and tax evasion problems brought about by the Libra project. In theory, virtual currency is not easily traced and may be abused.

Although Facebook will definitely implement a strict authentication mechanism, Facebook may still have omissions for criminal traffickers to use the Libra project. This obviously made the US regulators feel uncomfortable because there was no way to conduct more comprehensive supervision.

Although the Libra project is developed and dominated by Facebook, there are also many agencies involved, such as some banks in the United States, virtual currency exchanges and large companies. According to the Financial Times, there are already many founding members of Libra considering exiting, and the only reason to consider exiting is to worry about potential regulatory issues. The founding institutions that considered these exits are really worried that participation in Libra may affect existing businesses and that regulatory review will involve these existing businesses.

Facebook has already explained the Libra project at the US Congress hearings, and Libra will not officially go online until it promises to solve regulatory problems. However, after a long time, Facebook did not come up with any practical countermeasures to solve the regulatory problems, and no regulatory agency recognized the Libra project. After the Financial Times reported this negative Libra news, Facebook and the Libra project official refused to comment, and of course, did not issue any statement on regulatory issues.