Will Facebook Be Allowed To Launch Own Crypto In 2021?

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Last Updated on 23 March 2021 by CryptoTips.eu

Jeroen Kok

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The attack on the US Capitol in the beginning of the year is thus far the story of 2021. It has left many winners and just as many losers. President Trump and the QAnon conspiracy theorists are generally seen as the losers, as well as prohibited app Parler, which sought to replace twitter for conservative voices in the US.

The Democrats, new US President Joe Biden and many in Silicon Valley are seen as the winners… except for one company which is getting all the blame for the mess, namely Facebook.

Problems are piling up for CEO Mark Zuckerberg, who is persona non grata in Washington DC, who sees his company getting sued by pretty much all the states in the US and the FTC (Federal Trade Commission).

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Diem or Libra 2.0

The timing is of course quite bad as Facebook was supposed to start rolling out it’s own stablecoin Diem this month. As January is nearing it’s end, we should ask: will that still happen?

Libra (now called Diem) was originally blocked by the global financial system who saw it as a threat to their existence. At the moment of it’s blocking, speculation was rife that regulators would also target Bitcoin and Ethereum, but that hasn’t happened since.

As Diem can be marketed to a massive global userbase, it prompts immediate concerns over money laundering, tax evasion and how it will affect the ability of central banks to regulate money.

Back in October, Facebook explained the name change of its once doomed stablecoin project Libra to Diem and assured everyone that the new crypto, which would be accessible to its 2 billion users, was set for launch in January 2021. However, with the situation as it stands, there are at least three obstacles that will prevent Diem from being successful in 2021, namely: regulation, data privacy and politics.

Regulation

The big risk for Facebook at the moment as it wants to launch a digital currency product like Diem is regulation. Launching a stablecoin just as the FTC is suing Facebook for a monopoly position could be overreaching. At this very moment, regulators seek to understand the platform and predict the risks and challenges that its operation may pose.

Data and privacy

In February 2018, Facebook was found guilty by German and Belgian courts of violating privacy laws. This decision was taken because Facebook caused the loss of data on 30 million user accounts.

Given the fact that Facebook will be asked during the upcoming impeachment trial of former US President Donald Trump to once again hand over data of users that the FBI now consider domestic terrorists, aka the people who stormed the Capitol, expect Facebook’s data policies to be held under the spotlight once again.

Political risk

The biggest risk for Zuckerberg is that he might rub the new White House the wrong way. It is becoming quite obvious that the Democrat’s blame the many groups spreading conspiracy theories on Facebook for having set off the biggest political upset of the past few years.

Facebook and Zuckerberg have seen their political influence diminish in the past few years.

Sarah Miller, a member of Joe Biden’s transition team admitted recently what the White House thinks of Mr Zuckerberg:

He’s not a welcome figure at the cocktail party any more. And I don’t think he has been for a long time.

There is not a lot of love lost there. Facebook is broadly seen as the most prominent villain, among all the tech monopolists.

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