Facebook’s Foray Into Financial Services Is Struggling to Gain Momentum – Here’s Why
By Alex Katsomitros
“It was a neat idea that’ll never happen, and I have nothing else to say about it.” JPMorgan Chase CEO Jamie Dimon didn’t mince his words when asked about the fate of Libra, the digital currency expected to be launched by a Facebook-led coalition later this year. Dimon’s assessment came after several members of the Libra Association, the Geneva-based body overseeing the launch of the currency, withdrew from the project.
The timing couldn’t have been worse. Announced just a few days before the group’s first board meeting, the exodus – which started with PayPal and soon included Stripe, Mercado Pago, Mastercard, Visa, eBay and Booking Holdings – dealt a heavy blow to the currency’s reputation.
“It costs the Libra project some credibility,” John Sedunov, an associate professor of finance at Villanova University and an expert on cryptocurrencies, told World Finance. “You have institutions that are well versed in processing payments and handling data leaving the project. It can survive without these partners, but the costs of doing so will be higher.”
Photo courtesy of Pixabay.