CNBC’s “Power Lunch” team recently broke down Treasury Secretary’s Steve Mnuchin’s comments on Facebook’s planned cryptocurrency. Analyst Brent Thill said that, out of 600 US Facebook users surveyed, 80% said they would never use the Libra.
The Libra is experiencing significant regulatory hurdles before launch, but it also may be a difficult sell to actual Facebook users. Brent Thill, a social media analyst at Jefferies, told CNBC’s “Power Lunch” recently that only 20% of US Facebook users polled were willing to use Facebook’s cryptocurrency.
The results indicate that, right out of the gate, there is significant pushback against the Libra from Facebook’s own users. Thill stresses, however, that Libra’s impact will likely be more felt globally among populations with fewer banking options than US consumers. The Libra will be available to some 2B people through WhatsApp, Messenger, and the native Facebook platform.
According to Thill, we likely won’t feel the Libra’s impact, if successful, until 2022 or 2023. Generally speaking, it takes a few years for new technology to launch. However, given that we’ve never seen an established platform like Facebook release its own cryptocurrency before, these assumed rules may be broken. Overall, Thill is positive “long-term” that Libra will be successful; in the short-term, it will be an uphill battle.
Yesterday, US Treasury Secretary held a press conference on cryptocurrencies, but most of the time spent was on discussing the Libra. As of now, Mnuchin said he is “not comfortable” with the proposal and echoed common concerns, citing the potential for illegal financial activity via the Libra as a major concern. He also criticized Bitcoin for the same reason, as being a facilitator for potential terrorist funding and ‘dark money.’
However, Mnuchin’s comments were not damning enough to stop the Libra in its tracks. Criticism is to be expected and given Facebook’s lobbying power, it’s hard to believe that the Libra won’t receive the regulatory green-light. We can expect the social media cryptocurrency to be released sometime in 2020 if all goes well on the regulatory front.
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