Libra cryptocurrency given cold shoulder

Questions are being raised about Libra’s privacy, security and regulation. (PC Mag photo)

PayPal is cautious about the future of Facebook-backed cryptocurrency Libra, which is slated to debut with the pioneering digital payments firm as part of its oversight association.

International outcry is mounting over Libra—with central banks, governments and regulators railing against Facebook’s upstart cryptocurrency and questions over how it would be regulated.

The social media giant unveiled plans in June for Libra, which will roll out in 2020, to be backed by a basket of currency assets to avoid the wild swings of Bitcoin and other virtual units.

“It’s a non-binding commitment,” PayPal investor relations vice president Gabrielle Rabinovitch said Thursday of the California-based company signing on to the Libra Association.

“And obviously, I think there’s a lot of work to happen before we get to that point where it becomes something more than just a very exciting idea.”

The nonprofit Libra Association, based in Geneva, will oversee the blockchain-based coin, maintaining a real-world asset reserve to keep its value stable.

Facebook envisioned Libra as a new global cryptocurrency, pledging to deliver a stable virtual money that lives on smartphones and could bring over a billion “unbanked” people into the financial system.

Hundreds of billions of dollars are transferred annually between migrants and loved ones in their home countries, and PayPal is a player in that sector.

In France, finance minister Bruno Le Maire said they will block the development of Libra in Europe.

Le Maire said plans for Libra could not move ahead until concerns over consumer risk and governments’ monetary sovereignty were addressed.

“I want to be absolutely clear: in these conditions, we cannot authorise the development of Libra on European soil,” Le Maire. speaking at a conference in Paris on virtual currencies on Thursday, said.

The governor of the Bank of England, Mark Carney, gave Libra a cool reception in June, saying Threadneedle Street would approach the digital currency with “an open mind but not an open door”.

He said the digital currency would have to meet the highest standards of prudential regulation and consumer protection, and address issues such as money laundering and data protection.

“The goals and ambitions of Libra are very consistent with PayPal’s overall ambitions in terms of serving the underserved; democratizing access to capital,” Rabinovitch said.

“So we very much believe in the potential of Libra.” (With a report from The Guardian)