Little faith in Facebook currency

Facebook’s cryptocurrency play, Libra, is yet to win over the Australian public.

Facebook’s cryptocurrency play, libra, is yet to win over the Australian public, with research conducted by ASX-listed Pureprofile highlighting a significant trust-deficit when it comes to the social networking company handling their money.

The research, conducted in July 2019, shows 76 per cent of respondents still putting their trust in traditional financial institutions instead of Facebook. Meanwhile, 64 per cent said they would not share their financial information with Facebook.

Libra, which is set to launch in 2020, is designed to be stored by consumers in a digital wallet that will be accessible through Messenger, WhatsApp, and an app called Calibra. The social media giant is targeting the 1.7 billion people around the world without bank accounts.

However, Pureprofile’s research hints at the level of public resistance Facebook will have to overcome to make libra a success, with 53 per cent of respondents in the survey saying that regulators shouldn’t allow Facebook to ­operate a virtual bank.

Pureprofile chief operating officer Melinda Sheppard told The Australian there were serious question marks about whether Facebook was the right company to drive the project instead of the traditional players in the financial services sector.

“What’s interesting about libra is Facebook has led the charge, and yet you look at the other companies in the consortium, there are many other brands you could lead with and say ‘oh that makes sense’, like Visa or Mastercard,” she said.

It’s a sentiment that may yet be libra’s undoing, at least in its current form, with the consortium put together by Facebook to build the digital currency starting to fray. PayPal has officially walked away from the project and both Mastercard and Visa, as well as digital payments platform Stripe, are looking to bail as well, according to The Wall Street Journal.

Ms Sheppard added there was a distinct generational divergence when it comes to the attitudes towards libra.

“Seventy-eight per cent of baby boomers said they’d be highly unlikely to use it, while if you look at millennials, that number comes to 51. There is undoubtedly a real age difference in how people respond to it, and I’d say Facebook will likely target predominantly millennials as it seems they’re the only ones who will be comfortable with it.

“The question is whether Facebook are the right people to be doing this, and right now it isn’t the case; people are still very uncomfortable with the idea of Facebook having a currency,” Ms Sheppard said.

“We do trust the banks. And we don’t expect or believe our money will be moved. What we don’t trust with them is maybe some of the products they’re trying to sell us. But we do trust our money will be safe.”