Libra’s head of policy and communication asserted that every new business venture has its share of risk and reward. You will never come to know about the destination if you do not go on a journey. Change is an inevitable element in every business concern, and one needs to be prepared to face unexpected challenges says a higher ranking official at Paypal. Commitment, persistent efforts, and dedication is the key to overcoming challenges and keeping promises.
PayPal’s Exit Causing A Stir
With the announcement of U.S. payment processor PayPal calling it a quit from Facebook’s Libra Association, it has canceled its further plans to continue as one of the financial partners. Though PayPal supports the aspirations of Libra, it will shift its focus on its other ongoing businesses to ensure further growth. PayPal’s business plan is to center its attention on democratizing financial services to the public irrespective of their economic status. PayPal’s exit does not hint that it will break all business ties with Facebook. On the contrary, it will look forward to the future business association with Facebook.
Facebook’s Libra Turning Heads
Facebook raised many eyebrows when Libra declared its cryptocurrency in June 2019. It was met with widespread condemnation. Facebook came under the lend of Federal Reserve, former lawmakers, global regulators, senior financial committee members, and industrial counterparts. They questioned Facebook’s decision for the move. They were concerned about consumer protection with regard to financial stability, money laundering, and financial privacy. An inspection committee was set up to scrutinize if Facebook’s launch was against the interest of the public. Facebook made all necessary efforts to convince the lawmakers that despite the additional association with several other companies, it would not hold a unilateral control over the currency. Other companies are re-evaluating their decision on joining Libra and waiting to get greater clarity on the future of the project.
Apprehensions Of Financial Associates
The Libra Association is backed by twenty-eight corporates, which also includes Facebook. However, after PayPal’s is backing out, Libra Association will be left with 27 financial partners. Facebook announced that each founding member is required to contribute a minimum amount of $10 million as the fund for launching the incentive program. Furthermore, the fund is raised for operating costs Despite the announcement, no member has yet come forward to contribute to initiating the drive. Under such circumstances, PayPal’s retreat is a cause of concern for financial partners, and all those who are dealing with Libra. As a result of the strong adverse reaction from government officials, Mastercard, Visa, and other financial associates are also considering a walk-out from Facebook’s Libra cryptocurrency project. There is an apprehension that eBay and Stripe may also follow the footsteps of Facebook Libra’s project. If financial partners do not have confidence in Facebook’s Libra cryptocurrency, they may leave one by one. Under such circumstances, Libra may not be able to survive the collapse. Libra will need to bring back its financial partners by assuring them of a well-regulated blockchain network and securing digital payments.
The lawmakers apprehend loopholes in the project. French and German officials are not in favor of the launch of the project. They are creating an obstacle. The lawmakers of the House Financial Services Committee are holding the chief executives of Facebook answerable for causing a dent in the price of original cryptocurrency bitcoin. They will summon them to Capitol Hill to provide evidence and justify their actions related to the project of nonprofit Facebook’s Libra cryptocurrency. The U.S. Federal Reserve Chairman Jerome Powell wants Facebook to submit a concrete digital currency plan if it seriously wants to go forward. Otherwise, it could pose a threat to the smooth implementation of cryptocurrency. It would become a serious concern if Libra cannot prove its potential worth and make endeavors to satisfy the requisites of the regulatory expectations.
Although PayPal’s pull-out created quite a stir among the members of the House Financial Services Committee, it is expected that Facebook Libra will clear its stand in the cryptocurrency financial world. Irrespective of what is being said, action reveals the future of Libra.