According to reports, Brad Garlinghouse, the CEO of Ripple, has declared that Facebook is going to face challenges when it decides to launch its crypto project because it has “let the public down.” Garlinghouse, made this declaration when he spoke to Yahoo Finance UK. In his words:
“The new world order of virtual assets has been built on trust. Many people trust Bitcoin, Ethereum, and XRP. But this isn’t the same with Libra. Whatever you might think about Facebook, when it comes to the issue of trust they have let the public down and this creates some headwinds. You will have observed this manifest in the recent regulatory engagement that Facebook has had.”
Facebook Announced Plans for its Stablecoin in June
It should be recalled that after several weeks of speculation, Facebook decided to announce that it has initiated plans to launch a cryptographic project. The token will be a global cryptocurrency and stablecoin called Libra. The digital currency is expected to go live sometime next year. The social media giant said that its new cryptocurrency is going to be decentralized. It will be handled by the Libra Association. The Libra association is a Swiss-based non-profit organization that features 27 other firms including PayPal, Visa, MasterCard, and eBay.
The announcement of a stablecoin launch by Facebook was met by an immediate backlash from regulators and policymakers globally. There have been concerns about Facebook’s latest initiative. It is understood that G7 nations immediately launched an inquiry after the announcement. The United States Congress even called Facebook to answer questions regarding its cryptographic project. U.S House of Representative Maxine Waters reportedly called for an immediate halt to the ambitious initiative at least until regulators could make sure the project was compliant with stipulated guidelines.
Facebook Claims the Timing of the Initiative Was the Reason behind the Backlash
Garlinghouse said that Facebook initially “underestimated” the reaction to its announcement. The company referred to the timing of the announcement as a reason for the backlash.
“It’s partially like Boeing, which has its own problems right now,” Garlinghouse said. “They announced during the 737 Max crisis. Why would anyone want to do that? The issue with Facebook, considering the other things happening at the moment, I believe it is beginning to look interesting that many people weren’t in support of this one.” The Ripple chief concluded.
Remember that Facebook has in the past faced scrutiny from lawmakers over data handling. The social media giant has been on the radar of regulators and policymakers over data handling and a lack of transparency before now. The company was reportedly fined $5 billion by the United States Federal Trade Commission for misleading and deceiving users regarding data safety.
Crypto Community Also Questions Libra’s Legitimacy as a Digital Asset
Many in the crypto industry have questioned whether Libra is going to be a legitimate crypto. There are concerns regarding whether it will be a real crypto project or not considering Facebook’s central involvement as well as how the project is structured. Despite the fuss, Garlinghouse called Libra a positive event” for his own company Ripple. Ripple’s XRP is one of the top five digital currencies by market capitalization.
Ripple uses its XRP token to help banks and financial institutions carry out faster and cheaper international transactions.