Data Worries Keep Facebook Crypto Partners At Bay

Facebook’s GlobalCoin project has to overcome some big issues before its official launch.

CoinDesk spoke to seven knowledgeable sources about GlobalCoin, also known as Project Libra, revealing that the project’s software has been delayed because of potential blockchain partners’ reluctance to work on something that doesn’t appear to be a true cryptocurrency. With that in mind, one source estimated that testing the digital currency early next year would make more sense.

In addition, the social media giant plans to connect users’ financial information to their personal Facebook profiles, which means that the data would be under the company’s control. There have also been talks about integrating with external payment processors like Mastercard, who reportedly will help finance the project.

Facebook has declined to comment on the report.

But some in the blockchain industry are reluctant to join the project, given that users won’t have control over their digital identities. The sources said Facebook hasn’t had any luck in past discussions with startups Tendermint and Stellar. Facebook even reportedly expressed interest in acquiring MobileCoin. It eventually bought blockchain startup Chainspace.

Blockchain consultant Maya Zehavi told CoinDesk that the GlobalCoin consortium with Visa, Mastercard, PayPal and Facebook could create a system with limited accountability and the ability to exclude individual users from commerce. There is reportedly a $10 million minimum charge for prospective GlobalCoin node operators.

“They are creating an anti-competitive moat,” Zehavi said. “It creates a silo of data rails without any guarantees about data sharing among the different participants, and the computation being done to access the services. Meaning some computation being done could kick you out of Uber, Facebook and Shopify, if you become a risk-management issue.”

In the meantime, Facebook allegedly hired a team with several dozen crypto experts given annual compensation packages worth several million dollars each. The company is also pursuing partnerships with global brands such as Uber.