It is unlikely that Facebook's planned launch of its own cryptocurrency, Libra, in the first half of 2020 will happen.
European regulators and central bankers have started asking questions about how the currency will function in practice, pressing the tech company for more information beyond the white paper that was issued on the project. This level of scrutiny from regulators over cryptocurrency is unprecedented, given that central bankers have up until now largely avoided regulating cryptocurrencies.
Just last year, global central bankers concluded that digital currencies were too small to pose a risk to the financial system. However, the circumstances are different this time, given that Facebook has recently been embroiled in a number of controversies about its management of its users information.
European regulators are not just concerned about Facebook's privacy issues, but also have concerns about the potential for illegal activities such as money laundering. Furthermore, Facebook is one of the giant tech global players, and with its resources, reach and influence, it has the capacity to fundamentally change the current order of the financial system.
The head of the International Monetary Fund (IMF), Christine Lagarde recently voiced her concerns about the dangeres posed to the global financial payments system by giant tech firms like Facebook. Ms Lagarde points to their unlimited resources and very large customer base, which gives them the capacity to establish their own cryptocurrency, and the potential to take over the global financial payments system.
Facebook's Libra project is an ambitious attempt by the company to expand into the payments system, with the help of partners like Mastercard, PayPal and Uber. However, the planned launch in the first half of 2020 will not happen until regulators across Europe are confident that they have all the information they need and the capacity to properly regulate the currency.