TOP 3 REASONS Why Facebook CRYPTOCURRENCY Journey ENDED SUDDENLY

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Cryptocurrency is gaining a lot of traction over the last few years and many high-ranking firms have started to invest in it. While cryptocurrency has many positive signs for investors, it also comes with a lot more risks. Facebook (Meta), like many other top-tier manufacturers, joined the cryptocurrency market. After two years of preparation, Meta’s plan to sell its cryptocurrency business has been terminated. According to multiple media sources, Meta will sell its cryptocurrency-related technology to a small bank in California for $200 million.

The Diem Association is the company that runs the business. Last year, the project leader left. In 2019, the Diem Association published a whitepaper on cryptocurrency plans. He stated that he would create a super-sovereign currency for the world. This was not something that many governments around the globe were happy with. This was not appreciated by the United States, France and other governments.

Everything is falling apart, and Facebook cryptocurrency is on the verge of extinction. The company cannot sell the technology and “squeeze out” any remaining value. They also have to finish the project quickly. What has happened to Meta’s cryptocurrency over the past 2 years? Let’s take a look at 3 reasons why the Facebook cryptocurrency adventure is ending abruptly

1. CONTROVERSY RIGHT FROM THE VERY BEGINNING

The original name of the dystocia plan, Libra, was a cryptocurrency that Facebook launched in 2019. This digital currency does not seek a stable rate of exchange against the U.S. Dollar, according to its plans. It does however have stable purchasing power.

Initial plans included four currencies, USD, GBP and EUR. This plan attracted 27 partners. There are many companies, such as PayPal and VISA credit cards that can handle large transactions orders. This plan was enough to scare Western governments at the start.

LIBRA’S RHETORIC WAS DISCONTINUED BY THE GOVERNMENT

Facebook has a large user base, and it will have a huge transaction order. This was not something the west government was prepared to deal with. There were many irregularities as a result of attempts to stop Facebook’s cryptocurrency Libra. Libra’s emergence is being feared by global regulators. It was also feared that Libra could be used to launder money.

A large-scale attack and interception of Facebook’s cryptocurrency was prompted by the above fears. One month after the publication of the Libra whitepaper, the U.S. Senate Committee on Banking, Housing, and Urban Affairs hosted a hearing on July 16, 2019 to discuss Facebook’s cryptocurrency and data privacy concerns.

The U.S. Congress questioned Mark Zuckerberg at the hearing. He said:

China announced immediately that it was launching a public-private partnership project called China Digital Currency DCEP Program to expand Alipay’s reach into the digital RMB market. We must act. New things are risky.

The idea is to tell the US Congress that Facebook will not use Libra without the approval of the U.S. government. The entire process was so controversial that there were many boycotts.

2. GOVERNMENT and PARTNERS BOYCOTT LIVERA

The French Ministry of Finance announced in September that France and Germany would be boycotting the Libra cryptocurrency. Later news broke that five EU countries planned to boycott Libra in Europe. PayPal announced on October 5 that it would cease participation in the program after being pressured by all sides. Other partners also chose to opt-out.

In 2020, Facebook began to compromise and adapt. The 2020 plan changes the rhetoric of “borderless currency” and takes additional measures to ensure Libra is not misused. Libra’s anchored currencies have been decreased from 4 to 1. The US dollar is the only exception.

The company changed Libra to Diem at the end of the year to emphasize that it was a stable currency. This was to show the independence of this project and dispel any doubts from the US government. The company was disappointed with the final result. Diem was not able to launch in any country until the second half of 2021.

Later reports indicated that many of those involved in the creation of the cryptocurrency plan had to leave their jobs. The CEO announced his resignation on December 1, 2021. This ended his seven-year tenure at Facebook.

The massive boycott of Libra by partners and governments as well as top executives of the company was a clear sign of Libra’s death.

3. CRYPTOCURRENCY CONSISTENTLY FALLS PRICES

It is normal for cryptocurrency prices to fluctuate between highs and lows, sometimes even falling significantly. This is normal for cryptocurrency with a “backbone”, but it is not the norm. It will be detrimental for the creation of a new currency if digital currencies continue to rise and fall. Notable is the recent sharp decline in Bitcoin’s price. Many users wanted to leave the market after this caused much panic.

Industry analysts believe that this sudden shock is caused by increasing global regulatory scrutiny and a greater blow to the virtual currency markets. It is not possible to pinpoint the reason cryptocurrency prices fluctuate between rising and falling. One tweet by Elon Musk could cause a drop or rise in certain cryptos’ prices. This is the volatility of digital currencies.

CONCLUSION

Cryptocurrencies are certain to be around for the long term and will likely become the currency of the future. However, digital currencies face many challenges. Facebook cryptocurrency Libra (Diem), has to be pulled from launch. A Bloomberg report claims that Diem started selling its cryptocurrency projects because regulators were more hostile. A spokesperson for Diem Association claimed that the news was inaccurate. We know however that Libra’s (Diem’s) current situation was influenced by the initial controversies and the boycotts of governments and partners.

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