Facebook, Inc. (FB) is hoping to launch its cryptocurrency next year. David Marcus, head of Facebook Financial, or F2, told audiences at the Singapore FinTech festival that he hoped the company could participate in changing the financial services industry by launching Diem, Facebook's proposed digital currency for use on its social network, and Novi, the accompanying wallet for its Libra blockchain, on its platform.
The platform's launch is contingent on Facebook obtaining the necessary regulatory approvals to operate across multiple jurisdictions. Currently, the Libra association is awaiting permission from Swiss regulators to launch a dollar-backed stablecoin.
"I don't think what we are asking for is just immediate trust. I think … what we're asking for is at least to have the benefit of doubt," Marcus said. The Financial Times had earlier reported that Facebook planned to launch its cryptocurrencies in January 2021. The company had originally planned to launch the proposed currency and wallet over the summer this year.
- David Marcus, head of Facebook Financial, said he hoped that the company will be able to launch its digital currency and wallet next year, pending regulatory approval.
- Marcus said he hoped that regulators will give Facebook's project "the benefit of the doubt" while considering the case.
- The project has been mired in controversy since it was announced in 2019 and has undergone considerable changes in scale and composition.
A Change in Vision
Ever since June 2019, when Facebook announced its plans to launch a digital currency, the company has faced intense blowback from regulators across the world. The ambitious project has undergone multiple iterations and changes, from the exit of high-profile partners such as Mastercard Incorporated (MA) and PayPal Holdings, Inc. (PYPL) to a recent rebranding effort designed to distance the project from the social media behemoth and its reputation for infringing on privacy rights.
Perhaps the most important transformation has been that of the company's vision for Libra. When it was announced, Libra was envisaged as an open-source platform and a centrally managed stablecoin, or a coin that does not fluctuate in its price, for use on the social network. That plan raised the hackles of the crypto community and regulators alike.
The former argued that Facebook's plan was not a true cryptocurrency project because it was not decentralized, while politicians and economists raised the specter of the social network's cryptocurrency undermining national currencies, especially in less-developed countries. The refusal by Marcus to commit to appropriate regulatory oversight or a pilot project overseen by regulators further added to the project's hostile reception from all quarters.
There have been considerable changes since then. Libra will now have a series of stablecoins backed by fiat currencies of respective countries. The exit of high-profile partners from the project also means that it will have considerably less utility and cachet than originally planned. The project will also have to comply with regulations in jurisdictions where it operates.
Benefit of the Doubt
During Monday's appearance at the conference, Marcus pointed to Facebook's partnership with other companies as proof that the project was a decentralized initiative. "I think you'd be hard-pressed to find any company that has done this in recent history of actually building something, investing considerable amount of resources into it, and then saying ok, we are going to relinquish our power here and we are going to try to make it as open ecosystem as it can be and basically tie one or both hands in our backs when it comes to enabling competition on the very thing that we've created," he said, adding that the "complications in the execution" of Facebook's vision were "good reason" for regulators to give the project the benefit of the doubt in terms of intention.