A senior Facebook executive has said the tech behemoth’s proposed libra cryptocurrency will not experience viral growth like a social media platform and will take decades to gain traction.
“This is not going to be a thing that spreads like a social network,” Kevin Weil, vice president of product at Facebook’s Calibra digital wallet unit, told the Web Summit technology conference in Lisbon. “This is going to be the work not of years but of decades, and it’s worth making.”
Facebook has been facing intense regulatory pressure since it announced its plans for a digital currency in June. The Libra Association, a Switzerland-based consortium overseeing the project, saw key initial backers drop out, including Mastercard and Visa, last month as a result of the pushback, CNBC reported.
However, Weil seemed upbeat about the interest shown by other companies in joining Libra. “Eighteen months ago, this was an idea,” he said. “Today we have 21 fantastic, committed organizations that are members of the Libra Association; a bunch more that are looking to be involved. So expect that number to continue to grow.”
Libra’s value would be tied to a basket of government currencies and debt to maintain a stable value, similar to the many so-called “stablecoins” that are used to avoid the notorious volatility associated with cryptocurrencies such as bitcoin. Facebook says libra’s principal use case would be for remittances, where people such as expatriate laborers send money across borders.
Weil said that the libra token would significantly reduce the cost of sending money overseas, stressing that the average fee for remittances is 7% of the total transaction amount.
One of the chief concerns among politicians and regulatory bodies has been the fact that Facebook is the organization spearheading the digital currency initiative. Facebook boss Mark Zuckerberg has said that the tech giant “would be forced to leave” the association if members voted to move forward without the clearances it believes it needs.
“There are going to be people who are not comfortable using a financial product built by Facebook,” Weil said, adding that it’s “OK” if they feel that way. “You don’t have to use a Facebook product ever to get the greater value of the accessibility and lower cost brought by the libra ecosystem.”
The plan is for Calibra to be Facebook’s way of making a profit from libra, utilizing it with its digital wallet which users would be able to store and exchange funds on. Weil added that there would be many other wallets that can incorporate libra in the future.