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Why (Almost) Everybody Hates Facebook’s Digital Coin

The scrutiny has started.

The scrutiny has started.

Photographer: FABRICE COFFRINI/AFP/Getty Images
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Facebook Inc.’s plan to create a set of digital currencies, Libra, is a big idea. If a third of the social network’s 2.5 billion monthly active members use Libra, it might be in more (virtual) pockets than the U.S. dollar. On the other hand, it could flop if it turns out to offer little more utility than existing payment apps, or it might not ever see the light of day, if it’s strangled in its crypto-crib by regulators appalled by the idea of a potentially dominant global currency that could operate beyond their reach.

A set of digital coins that, according to Facebook, initially would just allow their users to send or receive money or pay for things within the social network but could eventually be used for transactions outside it as well. Balances and transactions would be run on a blockchain, a shared digital ledger run by members of the Libra Association that oversees the effort that Facebook started. The association initially included partners such as Mastercard Inc., PayPal Holdings Inc. and Visa Inc. In October, however, these three high-profile companies and several others pulled out amid a regulatory backlash. In April 2020, the Libra Association said it still hopes to launch late in the year, and is applying for regulatory licenses.