Given all the scrutiny Facebook has faced in Washington following the announcement of its planned venture into the cryptocurrency space, the social media giant appears to know what it’s up against to get its Libra offering launched.
This is why, in a second-quarter Form 10 Q filing with the Securities and Exchange Commission last week, the company conceded that there can be no assurance Libra’s planned 2020 launch “will be made available in a timely manner, or at all.”
“We do not have significant prior experience with digital currency or blockchain technology, which may adversely affect our ability to successfully develop and market these products and services,” said Facebook. “We will also incur increased costs in connection with our participation in the Libra Association and the development and marketing of associated products and services, and our investments may not be successful.”
In June, Facebook announced it was entering the cryptocurrency space with Calibra, a digital wallet for Libra, a global currency powered by blockchain technology. The wallet will be available in Messenger, WhatsApp, and as a standalone app.
So Facebook disclosed with the SEC that it knows its Libra currency might never launch. My guess is with some of the other big names involved (Spotify, Uber, Lyft, etc.), it gets through somehow.— Kyle Brasseur (@KBrasseurCW) August 1, 2019
What do you think? Will Libra ever see the light of day?
The recent filing with the SEC is Facebook’s first mention of its Libra plans to the regulator. The company acknowledged its involvement with the Libra Association—a group of companies including fellow founding members such as PayPal, MasterCard, Visa, Spotify, Uber, and Lyft—”will subject us to significant regulatory scrutiny and other risks that could adversely affect our business, reputation, or financial results.”
“Libra is based on relatively new and unproven technology, and the laws and regulations surrounding digital currency are uncertain and evolving,” Facebook said. “Libra has drawn significant scrutiny from governments and regulators in multiple jurisdictions and we expect that scrutiny to continue. As a primary sponsor of the initiative, we are participating in responses to inquiries from governments and regulators, and adverse government or regulatory actions or negative publicity resulting from such participation may adversely affect our reputation and harm our business.”
It added: “As this initiative evolves, we may be subject to a variety of laws and regulations in the United States and international jurisdictions, including those governing payments, financial services, and anti-money laundering. … These laws and regulations, as well as any associated inquiries or investigations, may delay or impede the launch of the Libra currency as well as the development of our products and services, increase our operating costs, require significant management time and attention, or otherwise harm our business.”
Facebook was taken to task on Capitol Hill earlier this month regarding Libra. Treasury Secretary Steven Mnuchin suggested the offering could represent a “national security issue,” while Federal Reserve Chairman Jerome Powell said the evaluation of the proposed currency “will be a patient one and not a sprint to implementation.”