Tech industry experts doubt that Facebook's Libra cryptocurrency will have a successful launch next year while others think the launch may not take place at all. The comments came following increased scrutiny from the U.S. federal government.
In an interview with CNBC on Wednesday, CEO of New York data privacy company BigID, Dimitri Sirota, noted that Facebook's Libra "won't get far" as long as social media users are concerned about the potential misappropriation of their financial information.
Sirota further noted that domestic and international regulators "don't trust Facebook to keep that data secure," referring to the private financial details of consumers who opt to use the cryptocurrency.
It's not surprising that Facebook continues to face backlash over its plan to launch Libra next year. The social media platform has been questioned multiple times for its ability to protect user data.
While some tech sector analysts believe that Libra has the potential to make it big in the digital currency world, others are more concerned about the data privacy risks that the proposed cryptocurrency could bring.
Matt Ocko, one of the U.S. social media giant's early investors, called on American regulators to block Facebook's Libra. He said he is hoping for regulators to "kill" the currency before it makes a name in the sector.
It is worth noting, though, that Facebook requested feedback from all organizations and authorities involved. The company said it values all recommendations and comments from tech experts and government offices.
Amid the backlash, other experts noted that the social media network has to keep track of regulations that vary regionally. Other U.S. states may be lax on cryptocurrencies but others are still unsure of how to welcome Libra.
Libra is expected to make a breakthrough in the digital money circle since it will bring innovative ideas to technology enthusiasts. On the other hand, it could also be shelved if the federal government continues to pressure the company for answers to queries on data security.
It's not just the doubts of tech industry experts that could take down Facebook's grand Libra launch plan. Federal Reserve Chairman Powell said on Wednesday that the cryptocurrency could be a serious threat to the country's banking and financial systems.
Powell acknowledged the potential opportunities that Libra could open for many people. However, he stressed that concerns regarding privacy and data protection should be addressed "publicly"
Due to the political tirades that Facebook received ever since it proposed Libra, the federal government said it continues to communicate and cooperate with other administrations around the world as well as central banks. The purpose is to get advice on how the issue should be handled.